# UNITED STATES TAX COURT

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## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

139 T.C. No. 18
UNITED STATES TAX COURT

BILLY EDWARD ARMSTRONG AND PHOEBE J. ARMSTRONG, Petitioners
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 28738-09.

Filed December 19, 2012.

P-H was divorced, and his ex-wife had custody of their son
C.E. A May 2003 arbitration award, a June 2003 State court order,
and a March 2007 State court order provided that P-H would be
entitled to the dependency exemption for C.E. (and the March 2007
order explicitly required his ex-wife to execute in his favor a Form
8332, "Release of Claim to Exemption for Child of Divorced or
Separated Parents"), on the condition that P-H pay child support for
C.E. P-H paid the full amount of child support throughout 2007, but
his ex-wife failed to provide the executed Form 8332.
P-H remarried. Ps timely filed their joint 2007 Federal income
tax return, attaching the May 2003 arbitration award. During an
examination of that return, Ps also provided R with P-H's 2003 and
2007 child support orders, the latter signed by P-H's ex-wife. R
disallowed Ps' claim for a dependency exemption deduction for C.E.
for tax year 2007.

SERVED DEC 1 9 2012

-2Held: As a substitute for Form 8332, the State court order
signed by P-H's ex-wife (C.E.'s custodial parent) does not comply
with I.R.C. sec. 152(e)(2)(A), because it fails to unconditionally
declare that the ex-wife "will not claim such child as a dependent" for
the year at issue.

Billy Edward Armstrong and Phoebe J. Armstrong, for themselves.

Lisa R. Woods, for respondent.

GUSTAFSON, Judae: The Internal Revenue Service (IRS) determined a

deficiency of $1,510 in the 2007 Federal income tax of petitioners Billy Edward
Armstrong and Phoebe J. Armstrong and an accuracy-related penalty of $302
pursuant to section 6662.1 The Armstrongs petitioned this Court, pursuant to
section 6213(a), to redetermine the deficiency and the accompanying penalty. The
case is now before the Court on the Commissioner's unopposed motion to submit
the case without trial on the basis of the parties' stipulation of facts, pursuant to
Rule 122. The issues for decision are whether the Armstrongs are entitled to a
dependency exemption deduction and a child tax credit for Mr. Armstrong's son
for the tax year 2007, and, if not, whether the Armstrongs are liable for an
'Unless otherwise indicated, all citations of sections refer to the Internal
Revenue Code of 1986 (26 U.S.C.) in effect for the tax year at issue, and all
citations of Rules refer to the Tax Court Rules of Practice and Procedure.

-3accuracy-related penalty on the resulting deficiency. We conclude that the
Armstrongs are not entitled to the deduction and the credit, but that they are not
liable for the penalty.

FINDINGS OF FACT
Mr. Armstrong is a truck driver. He and his former wife Dawn Delaney
divorced, and in 2003 the couple agreed to resolve by arbitration unspecified
questions regarding the support of their two children. The children stayed in
Ms. Delaney's custody, but the arbitration resulted in a May 2003 "Arbitration
Award" that granted to Ms. Delaney the tax exemption for "C.W." and to
Mr. Armstrong the tax exemption for "C.E."2 Under the arbitration award,
Mr. Armstrong would get the dependency exemption for C.E. outright for tax
years 2003 and 2004, but he would get it for later years, including 2007, only if he
stayed current with child support. The arbitration award did not include a
provision requiring Ms. Delaney to provide Mr. Armstrong with a Form 8332,
"Release of Claim to Exemption for Child of Divorced or Separated Parents." (As

we will explain below, Form 8332 is the document by which a parent who does
not have custody of a child may nonetheless become entitled to claim a
dependency exemption deduction for the child.) In June 2003 the Washington
2Pursuant to Rule 27(a)(3) we refer to minor children by their initials.

-4State court overseeing the divorce entered an "Agreed Order of Child Support on
Arbitration" that incorporated this arbitration award and likewise did not require
Ms. Delaney to give Mr. Armstrong a Form 8332.
In March 2007, for reasons not in the record, the Washington State court
changed the June 2003 order. The March 2007 order contained the following
provision:

3.17 INCOME TAX EXEMPTIONS.
Tax exemptions for the children shall be allocated as follows:
The Mother shall have the exemption for C[.W. and] the father shall
have the exemption for * * * [C.E.] , as long as the father is current
with his child support obligation for the tax year involved.
In reviewing whether or not the father is current, he must have made
all twelve of the tax year's child support payments by December 31st
of that tax year.
If payments are current, the mother shall provide the father for each
entitled year with an executed IRS Form 8332 (Release of Claim to
Exemption for Child of Divorced or Separated Parents) or its
equivalent not later than January 31st of the year immediately
following the year for which the tax exemption is to be claimed. The
purpose of this provision is to ensure prompt and regular payment of
the child support obligation; therefore, exemptions lost by failure to
be current on child support payments cannot later be claimed or
asserted by subsequent payment of back payments or arrears, nor
claimed as a set-off for unpaid support.

-5The parents shall sign the federal income tax dependency exemption
waiver. [Emphasis altered.]
Ms. Delaney signed the March 2007 order.
By 2007 Mr. Armstrong had remarried. He had consistently made his child
support payments required under the State court's orders. But Ms. Delaney
nonetheless failed to give him an executed Form 8332 for 2007. Lacking that
form, the Armstrongs attached a copy of the 2003 arbitration award to their timely

filed joint 2007 Federal income tax return.
The IRS examined that 2007 return. During the course of the audit, the

Armstrongs sent to the IRS copies of the 2003 and 2007 child support orders, the
latter of which had been signed by Ms. Delaney. The Commissioner nonetheless
rejected the Armstrongs' claim for a dependency exemption deduction and a child
tax credit for C.E., because the award and orders were "condition[al]" upon
Mr. Armstrong's staying current with his support obligations. The IRS also
determined an accuracy-related penalty. The Armstrongs timely petitioned this

Court, and at that time they resided in South Dakota. The parties stipulated the
facts and submitted the case for decision without trial.

-6-

OPINION
I.

Dependency exemption deduction claims under section 152
An individual is allowed a deduction for exemption for "each individual

who is a dependent (as defined in section 152) of the taxpayer for the taxable
year." Sec. 151(c). Section 152(a) defines the term "dependent" to include "a

qualifying child". Generally, a "qualifying child" must: (i) bear a specified
relationship to the taxpayer (e.g., be a child of the taxpayer), (ii) have the same
principal place of abode as the taxpayer for more than one-half of such taxable
year, (iii) meet certain age requirements, and (iv) not have provided over one-half
of such individual's support for the taxable year at issue. Sec. 152(c)(1). Under
those provisions, Mr. Armstrong could not claim C.E. as a dependent for 2007
because they did not have the same place of abode for more than one-half of the
year.

However, in the case of divorced parents, special rules determine which
parent may claim a dependency exemption deduction for a child. See sec. 152(e);
Espinoza v. Commissioner, T.C. Memo. 2011-108; cf. sec. 152(c)(4). Pursuant to
section 152(e), when certain criteria are met, a child like C.E. may be treated as a

qualifying child of the noncustodial parent (here, Mr. Armstrong) rather than of

-7the custodial parent (Ms. Delaney).3 Sec. 152(e)(1); 26 C.F.R. sec. 1.152-4T(a),
Q&A-2, Temporary Income Tax Regs., 49 Fed. Reg. 34459 (Aug. 31, 1984). C.E.
could be the qualifying child of Mr. Armstrong, under section 152(e)(1) and (2),

if-042 The "child receives over one-half of the child's support during the
calendar year from the child's parents * * * who are divorced * * *
under a decree of divorce", sec. 152(e)(1)(A);
042 such child was "in the custody of 1 or both of the child's parents for
more than one-half of the calendar year", sec. 152(e)(1)(B);
042 "the custodial parent signs a written declaration (in such a manner
and form as the Secretary may by regulations prescribe) that such
custodial parent will not claim such child as a dependent for any
taxable year beginning in such calendar year", sec. 152(e)(2)(A); and
042 "the noncustodial parent attaches such written declaration to the
noncustodial parent's return" for the appropriate taxable year, sec.

152(e)(2)(B).

3For these purposes, Ms. Delaney was C.E.'s custodial parent and Mr.
Armstrong was C.E.'s noncustodial parent, because the State court orders gave
Ms. Delaney sole custody of C.E. See sec. 152(e)(4); 26 C.F.R. sec. 1.152-4(b),
Income Tax Regs.

-8This case turns on whether Mr. Armstrong is able to show compliance with the
third of these criteria4--i.e., whether Ms. Delaney ever signed a declaration that she
"will not claim such child as a dependent".
The IRS's Form 8332 provides an effective and uniform way for a custodial
parent to make the declaration required in section 152(e)(2)(A) for the benefit of
the noncustodial parent. But a noncustodial parent like Mr. Armstrong may also
rely on an alternative document, provided that it "conform[s] to the substance" of

Form 8332.5 See 26 C.F.R. sec. 1.152-4T(a), Q&A-3, Temporary Income Tax
Regs., supra. In particular, for tax years including the year at issue here, a court
order that has been signed by the custodial parent may satisfy section 152(e)(2)(A)
as the noncustodial parent's declaration if the document "conform[s] to the

4The Commissioner also argues that the Armstrongs are unable to show
compliance with the fourth criterion--i.e., "attach[ing] such written declaration to
the noncustodial parent's return"--since the Armstrongs attached to their tax return
only the May 2003 arbitration award, and not the March 2007 court order that
Ms. Delaney actually signed. Since we are able to resolve the case on the basis of
the third criterion, we need not and do not reach this fourth criterion.
5Form 8332 requires a taxpayer to furnish: the name of the child; the name
and Social Security number of the noncustodial parent claiming the dependency
exemption deduction; the Social Security number of the custodial parent; the
signature of the custodial parent; the date of the custodial parent's signature; and
the year(s) for which the claims were released.

-9substance" of Form 8332.6 See Briscoe v. Commissioner, T.C. Memo. 2011-165
(concluding that the court order attached with the return did not conform with the
substance of Form 8332); cf. Boltinghouse v. Commissioner, T.C. Memo. 2003134 (holding a separation agreement conformed with the substance of Form 8332).
A basic element necessary for satisfying section 152(e)(2)(A) is a custodial
parent's declaration that she "will not claim" the child as a dependent for a taxable
year. A custodial parent accomplishes this on a Form 8332 with the following
statement: "I agree not to claim * * * for the tax year". This statement is
unconditional; and in order for a document to comply with the substance of Form
8332 and ultimately section 152(e)(2)(A), the declaration on the document must
also be unconditional. See Gessic v. Commissioner, T.C. Memo. 2010-88;
Thomas v. Commissioner, T.C. Memo. 2010-11; Boltinghouse v. Commissioner,

T.C. Memo. 2003-134; Horn v. Commissioner, T.C. Memo. 2002-290.

6FOr taXable years starting after July 2, 2008, a court order signed by the
custodial parent will not satisfy 26 C.F.R. section 1.152-4(e)(1)(ii), Income Tax
Regs., as amended by T.D. 9408, 2008-2 C.B. 323, 327 ("A written declaration not
on the form designated by the IRS must conform to the substance of that form and
must be a document executed for the sole purpose of serving as a written
declaration under this section. A court order or decree or a separation agreement
may not serve as a written declaration").

- 10 II.

The insufficiency of a custodial parent's conditional release
We assume here that Ms. Delaney's signature on the March 2007 order

constitutes, in effect, her declaration that she would comply with the order..
Therefore, the critical question is whether, by declaring that she would comply
with the March 2007 order, Ms. Delaney thereby declared that she "will not claim"

C.E. as a dependent in 2007.
That March 2007 order did not provide unconditionally that Ms. Delaney
would not claim a dependency exemption deduction for C.E. or that she must sign
Form 8332. Rather, the order unambiguously stated that her obligation to sign the
release--and Mr. Armstrong's right to the exemption-was conditional upon
Mr. Armstrong's payment of child support.7 This child support requirement

7Because the year at issue is 2007, this case is not governed by current
26 C.F.R. section 1.152-4(e)(1)(i), Income Tax Regs., as amended by T.D. 9408,
2008-2 C.B. at 327, effective for tax years starting after July 2, 2008. That
regulation states that "The written declaration * * * must be an unconditional
release of the custodial parent's claim to the child as a dependent for the year or
years for which the declaration is effective. A declaration is not unconditional if

the custodial parent's release of the right to claim the child as a dependent requires
the satisfaction of any condition, including the noncustodial parent's meeting of an
obligation such as the payment of support."

- 11 appears nowhere in section 152(e),8 of course; but the State court order affirmed
this obligation in four ways, by providing-042 that Mr. Armstrong would obtain the exemption (and
that Ms. Delaney would release it) only "as long as the
father is current with his child support obligation";
042 that entitlement to the exemption would require first a
determination of "whether or not the father is current";
042 that Ms. Delaney would release her claim only "If
payments are current"; and
042 that an exemption might be "lost by failure to be
current". (Emphasis added.)
That is, Mr. Armstrong would not obtain the exemption--and Ms. Delaney was not
obligated to release it--if Mr. Armstrong was not "current with his child support
obligation"; in that case, the exemption was "lost" to Mr. Armstrong, notwithstanding the other terms of the order. By signing the order, Ms. Delaney

effectively declared circumstances under which she would not release her claim
8The statute itself does provide a "support" criterion that must be satisfied
before a noncustodial parent may claim the dependency exemption deduction:
The first of the four criteria listed above is that the child must receive over onehalf of his support from his "parents" (without any distinction between the
custodial parent and the noncustodial parent). See sec. 152(e)(1)(A). The statute
does not condition a noncustodial parent's entitlement to the exemption on his
fulfillment of child support obligations. Rather, under the statute the noncustodial
parent may obtain the dependency exemption deduction as long as the parents
together support the child, the child was in the custody of one or both of them for
the year, the custodial parent executes a proper declaration, and the noncustodial
parent attaches that declaration to his return.

- 12 but would instead report herself to be entitled to the dependency exemption for

C.E.
Therefore, in signing and assenting to the order, Ms. Delaney did not
declare that she "will not claim such child as a dependent". Instead, she thereby
declared that she will not claim C.E. as a dependent i_f Mr. Armstrong keeps
current with support payments; but she also thereby unambiguously declared that
if he does not keep current, then she will claim the child as a dependent. This
makes her declaration quite different from a declaration that she "will not claim
such child as a dependent" for the year at issue. Sec. 152(e)(2)(A). And to that
extent, her conditional declaration is at odds with the statute, since "only a release
that is unconditional conforms to the substance of Form 8332". Thomas v.
Commissioner, T.C. Memo. 2010-11, slip op. at 9.
Of course, Mr. Armstrong can point to the stipulated fact that, although the
State court order was conditional, he fulfilled the condition: He did keep current
with his support obligations, so that under the terms of the order, he was entitled
to the exemption deduction and Ms. Delaney was obliged to execute the release.
The question here, however, is not what he was entitled to under the State court
order but what he is entitled to under section 152(e). See Miller v. Commissioner,

114 T.C. 184, 196 (2000) ("Although the Permanent Orders granted * * * [the

- 13 noncustodial parent] the right to claim the dependency exemptions for his
children, a State court cannot determine issues of Federal tax law"), aff'd on other
grounds sub nom. Lovejoy v. Commissioner, 293 F.3d 1208 (10th Cir. 2002).
The drafters of section 152(e) removed from the equation the issue of
proving support by the noncustodial parent. The statute requires a declaration that
the custodial parent "will not claim" the child, sec. 152(e)(2)(A) (emphasis added);
and where (as here) the noncustodial parent uses a substitute for Form 8332 from
which the statutorily mandated declaration is missing, and the custodial parent
declares instead that she may or may not claim the child, that defect is not cured
by the noncustodial parent's proof that he has fulfilled support conditions beyond
those in the statute, see Brissett v. Commissioner, T.C. Memo. 2003-310
(compliance with terms of separation agreement not sufficient to authorize
dependency exemption deduction without attaching valid Form 8332 or

equivalent).
The record in this case illustrates the commonplace that custody and support
orders are amended from time to time, and we have observed that "the Internal
Revenue Service cannot be expected to police divorce decrees and separation
agreements or determine taxpayer compliance therewith." See Gessic v.
Commissioner, T.C. Memo. 2010-88, slip op. at 8. Moreover, support obligations

- 14 will sometimes consist of more than stated amounts of monthly payments; a
support obligation may, for example, include health insurance coverage, the
varying cost of which will in turn affect the amount of the cash payment otherwise
due from the noncustodial parent. The question whether the noncustodial parent
has fulfilled his obligations, though apparently easy in this instance, may be
difficult and controversial in others. If that question had to be answered before
one could determine the proper claimant of the dependency exemption deduction,
then section 152(e) would fail of its purpose. As we explained in Miller v.
Commissioner, 114 T.C. at 195-196, Congress added the written declaration
requirement to section 152(e) in 1984 to provide more certainty to the "often
subjective and * * * difficult problems of proof and substantiation" that
accompanied dependency exemption deduction disputes under the prior statutory

scheme. H.R. Rept. No. 98-432 (Part 2), at 1498 (1984), 1984 U.S.C.C.A.N. 697,
1140.9 Any rule by which Mr. Armstrong could prevail here would require us to
9The House report stated:
The present rules governing the allocations of the dependency
exemption are often subjective and present difficult problems of proof
and substantiation. * * * The committee wishes to provide more
certainty by allowing the custodial spouse the exemption unless that
spouse waives his or her right to claim the exemption. Thus,
dependency disputes between parents will be resolved without the
(continued...)

- 15 revert to resolving those "difficult problems of proof and substantiation" that we
were supposed to leave behind with the prior scheme. We therefore hold that
under section 152, C.E. is not a qualifying child of Mr. Armstrong for tax year
2007; and as a result, Mr. Armstrong is not entitled to the dependency exemption
deduction for C.E. for 2007.
Mr. Armstrong's case is quite sympathetic: He was up to date on his child
support; and under the State court order, Ms. Delaney was obliged to sign
Form 8332 and release the exemption deduction to him. We are obligated,
however, to follow the statute as written, whether the resulting disadvantage is (as
here) suffered by a noncustodial parent who bore the burden of child support but
did not receive an executed Form 8332, or whether the disadvantage is suffered by
a custodial parent who executed a Form 8332 but then bore an undue and

unintended burden of child support.

9(...COnlinued)
involvement of the Internal Revenue Service.

H.R. Rept. No. 98-432 (Part 2), at 1498-1499 (1984), 1984 U.S.C.C.A.N. 697,
1140.

- 16 -

III.

Child tax credit
A taxpayer is entitled to a child tax credit for "each qualifying child", as

defmed in section 152, who has not reached the age of 17. Sec. 24(a), (c)(1).
Given our determination that, under section 152, C.E. is not a "qualifying child" of
Mr. Armstrong for the year at issue, it follows that Mr. Armstrong is not entitled to

a child tax credit for C.E. for that year.
IV.

Accuracy-related penalty
A.

General principles

Section 6662(a) and (b)(1) and (2) imposes an "accuracy-related penalty" of
20% of the portion of the underpayment of tax that is attributable to the taxpayer's
negligence or disregard of rules or regulations or that is attributable to any
substantial understatement of income tax. By definition, an understatement of
income tax for an individual is substantial if it exceeds the greater of $5,000 or
10% of the tax required to be shown on the return. Sec. 6662(d)(1)(A). Since the
deficiency here is only $1,510, there was no "substantial understatement", and the
Armstrongs are liable for the penalty only if claiming the dependency exemption
deduction for C.E. amounted to negligence.

Under section 7491(c), the Commissioner bears the burden of production
and must produce sufficient evidence that the imposition of the penalty is

- 17 appropriate in a given case. Once the Commissioner meets this burden, the
taxpayer must come forward with persuasive evidence that the Commissioner's
determination is incorrect. Rule 142(a); Higbee v. Commissioner, 116 T.C. 438,

446-447 (2001).
For purposes of section 6662, the term "negligence" includes a failure to
exercise ordinary and reasonable care in the preparation of a tax return. 26 C.F.R.
sec. 1.6662-3(b)(1), Income Tax Regs. Negligence is defined as a lack of due care
or failure to do what a reasonable and ordinarily prudent person would do under
the circumstances. Neely v. Commissioner, 85 T.C. 934 (1985). The term
"disregard" includes any careless, reckless, or intentional disregard of the rules or
regulations. Sec. 6662(c).
A taxpayer who is otherwise liable for the accuracy-related penalty may
avoid the liability if he successfully invokes one of two defenses pertinent here:'°
First, section 6662(d)(2)(B) provides that an understatement attributable to an item

may be reduced where the relevant facts affecting the item's treatment were
adequately disclosed on his tax return and the taxpayer had a reasonable basis for
1°Another potential defense does not appear to be implicated here: Section
6662(d)(2)(B) provides that an understatement may be reduced where the taxpayer
had substantial authority for his treatment of any item giving rise to the
understatement. There is no authority that can be cited in support of the
Armstrongs' claim founded on Ms. Delaney's conditional release.

- 18 his treatment of that item. Second, section 6664(c)(1) provides that, if the
taxpayer shows, first, that there was reasonable cause for a portion of an
underpayment and, second, that he acted in good faith with respect to such
portion, then no accuracy-related penalty shall be imposed with respect to that
portion.

B.

Application to this case

Having kept up to date on his child support, Mr. Armstrong knew that,
under the State court order, he was entitled to receive Ms. Delaney's release of the
exemption for C.E. and to claim the dependency exemption deduction for himself.
And he was indeed so entitled, under that order. He had in his possession a copy
of one version of the court order to that effect that bore Ms. Delaney's signature.
Court orders can sometimes suffice as an equivalent to Form 8332; and since he
lacked the Form 8332 to which he was entitled, Mr. Armstrong attached, to his tax
return, a copy of a prior iteration of that order--i.e., the arbitration award. The

arbitration award, like the later court order, explicitly disclosed the conditionality
of Ms. Delaney's obligation to give him the release (and the absence of her
signature on that version of the document was evident).

On these facts, we do not think that the Commissioner has borne his burden
to show negligence. We do not believe that Mr. Armstrong, a truck driver, was

- 19 sufficiently experienced in tax accounting and law such that he would realize that
entitlement under the State court order to Ms. Delaney's release did not
necessarily mean entitlement under section 152(e) to the dependency exemption
deduction, a distinction that might not occur to many taxpayers.
Moreover, if the Armstrongs' reporting position had amounted to
negligence, we think either or both of the defenses described above would excuse
them from penalty, on the facts of this case: First, regarding section
6662(d)(2)(B), the facts underlying the Government's position were certainly
disclosed on the tax return by the attachment of the arbitration award. And
although Ms. Delaney's release did not satisfy section 152(e), it was not
unreasonable for Mr. Armstrong to believe that it did.
Second, regarding section 6664(c)(1), whether the taxpayer acted with
reasonable cause and in good faith depends on the pertinent facts and
circumstances, including his efforts to assess his proper tax liability and his

knowledge and experience. 26 C.F.R. sec. 1.6664-4(b)(1), Income Tax Regs. The
State court order and his compliance with it constituted reasonable cause to
someone in his circumstance, and nothing in the record of this case suggests
anything other than that he acted in good faith.

- 20 Therefore, although we hold in favor of the Commissioner with regard to
the tax deficiency, we hold in favor of the Armstrongs with regard to the penalty.

Decision will be entered
for respondent with regard to the
deficiency and for petitioners with
regard to the accuracy-related penalty.
Reviewed by the Court.

THORNTON, COLVIN, FOLEY, GALE, MARVEL, GOEKE, WHERRY,
KROUPA, PARIS, MORRISON, and KERRIGAN, H., agree with this opinion of
the Court.

- 21 GOEKE, J., concurring: The opinion of the Court narrowly focuses on the
conditionality of the March 2007 order in determining that the document was
insufficient to satisfy the section 152(e)(2) custodial parent release exception. The
opinion of the Court's analysis is cogent and accurate; however, a noncustodial
parent may validly claim a section 152 dependency exemption only if he or she
"attaches such written declaration to the noncustodial parent's return for the
taxable year beginning during such calendar year." Sec. 152(e)(2)(B) (emphasis
added). Petitioners surrendered the March 2007 order during audit of their 2007
tax return. Clearly then, petitioners did not "attach" the relevant document to their
return.

Although the opinion of the Court considers the March 2007 order, it
acknowledges that-The Commissioner also argues that the Armstrongs are unable to show
compliance with the fourth criterion--i.e., "attach[ing] such written
declaration to the noncustodial parent's return" [section 152(e)(2)(B)]-since the Armstrongs attached to their tax return only the May 2003
arbitration award, and not the March 2007 court order that Ms. Delaney
actually signed. Since we are able to resolve the case on the basis of the
third criterion [i.e., conditionality], we need not and do not reach this fourth
criterion. [See op. Ct. note 4.]

The dissent, however, addresses this issue that the opinion of the Court explicitly
avoids. The dissent offers that the term "attach", as used in the statutory scheme,

- 22 is properly defined as "associated with" or "connected to by attribution";
accordingly, the dissent effectively submits that all relevant documents are
"attached" to a taxpayer's return, irrespective of any temporal considerations
relating to the point at which those documents were tendered to the Commissioner.
Any such interpretation is contrived and devoid of context.

The dissent's proffered secondary defmitions of "attach" are not, as
suggested, all "plain meanings [that] vary so widely", see dissenting op. p. 54, but
rather are figurative extensions of its plain, literal meaning, "to fasten", see id. pp.
53-54 & note 11. The plain meaning of a statute is the literal meaning of its
words; and unless it is unreasonable to do so, we should prefer the plain and literal
meaning of a statutory term. See United States v. Ron Pair Enters., Inc., 489 U.S.

235, 242 (1989) ("The plain meaning of legislation should be conclusive, except
in the 'rare cases [in which] the literal application of a statute will produce a result
demonstrably at odds with the intentions of its drafters.'" (alteration in original)
(quoting Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571 (1982))). If
secondary figurative definitions could claim "plain meaning" status, then Congress
would have to frequently qualify its chosen language with the adverb "literally" to

foreclose the dissent's interpretive method. We should reject any such artificial

- 23 complication of the Code and, instead, employ a traditional, consistent and
pragmatic approach to statutory interpretation.
Indeed, a cursory reading of the numerous section 152(e)(2) cases decided
by this Court reveals that we have uniformly held that the Form 8332 or similar
document should be affixed to the return at issue. See, e.a., Chamberlain v.

Commissioner, T.C. Memo. 2007-178, 2007 Tax Ct. Memo LEXIS 181, at *8-*9;
Brissett v. Commissioner, T.C. Memo. 2003-310, 2003 Tax Ct. Memo LEXIS 311,
at *8-*9. In the seminal dependency exemption case of this Court, Miller v.

Commissioner, 114 T.C. 184, 191 (2000), aff'd sub nom. Lovejoy v.
Commissioner, 293 F.3d 1208 (10th Cir. 2002), we prefaced our discussion of
whether a divorce document qualified as "a statement conforming to the substance
of Form 8332" by specifically finding that the taxpayer "attached" the document to
his return. However, if we were to accept the position of the dissent in the present
case, this prelude would be irrelevant, as apparently all documents which are
submitted to the Commissioner at some indeterminate point may be appropriately
considered by the Court.
Furthermore, while the dissent endeavors to manipulate the seemingly plain
meaning of the term "attach" to accommodate the expanding electronic tax return
filing regime, we are presented with no reason to do so in this case. Petitioner

- 24 physically filed his individual tax return for taxable year 2007, and our focus

should appropriately narrow to those particular facts. Instead, by approaching this
present matter in a side opinion, we risk complicating our tax laws by implication.
Indeed, the dissent's mere suggestion that the term "attach" is subject to different
interpretations may have unintended and far-reaching consequence. See
dissenting op. note 13 (finding 15 current Code references to "attach" or
"attachment"). The onus of harmonizing the statutory scheme with nonstatutory
changes in effective administrative procedure falls upon Congress and not this
Court.
We must be both circumspect and judicious in avoiding a manufactured
ambiguity in our tax laws. The deliberate use of the word "attached", in the
context of section 152(e)(2)(A), was intended to prescribe a contemporaneous
affixation requirement; we have so held before.

THORNTON, GALE, MARVEL, WHERRY, KROUPA, GUSTAFSON,
and MORRISON, H., agree with this concurring opinion.

- 25 HOLMES, J., dissenting: Mr. Armstrong promised to pay child support to
his ex-wife, Ms. Delaney. Ms. Delaney agreed to let him claim the dependency
exemption for one of their two children if he did. Mr. Armstrong paid the child
support on time and in full throughout 2007. Ms. Delaney refused to sign the
required IRS form that would have proved his claim. The Commissioner then
rejected his claim, even though Mr. Armstrong had attached a copy of the
arbitration award spelling out the deal to his 2007 return. Mr. Armstrong later
produced undisputed evidence--a state court order--that Ms. Delaney had signed
off on the agreement to give him the right to claim the exemption, and that he had

kept his promise to pay support.
That state court order specified that as long as Mr. Armstrong kept current

with child support, he "shall have" the tax exemption for his minor child, C.E. It
also mandated that Ms. Delaney "shall provide" Mr. Armstrong "an executed IRS
Form 8332" for every year he was entitled to the exemption. Even though Mr.

Armstrong kept his promise and paid his child support, Ms. Delaney did not keep
her part of the deal and never gave him an executed Form 8332. The first question
here is whether that state court order that Ms. Delaney did sign "conform[s] to the

substance" of Form 8332. See sec. 1.152-4T(a), Q&A-3, Temporary Inconie Tax

- 26 Regs., 49 Fed. Reg. 34459 (Aug. 31, 1984). The opinion of the Court agrees with
the Commissioner that it doesn't. I don't take the same view.
I.

Conditionality
Divorce decrees and separation agreements often transfer the right to a

dependency exemption from one parent to another. They also very often make
that transfer conditional--usually, as in this case, on the timely payment of child
support. Yet the question of whether such conditional language makes it

impossible to use that decree or agreement as a custodial parent's "written
declaration * * * that such custodial parent will not claim such child as a
dependent," sec. 152(e)(2)(A), is not one that has been analyzed by any circuit
court or even, before today, answered by our Court in a precedential Opinion. (It
is one that a number of our memorandum opinions have touched on.)
The majority says it is "obligated * * * to follow the statute as written," see
op. Ct. p. 15, and concludes that allowing Mr. Armstrong to take the dependency
exemption based on a state-court order containing even an unambiguous condition
is "at odds with the statute," id. p. 12.
I agree that we must follow the statute as written, but what does the statute

mean?

- 27 The question presented is: Does language in a state-court decree that
"noncustodial X shall have the exemption for C.E. as long as he is current with his
child support obligation for the tax year involved""conform to the substance" of
Form 8332's and section 152(e)'s requirement for a written declaration from
custodial Y that she "will not claim such child as a dependent for any taxable year
beginning in such calendar year?" Translated into English, the question is
whether Ms. Delaney's signed promise that Mr. Armstrong shall have the
exemption for C.E. if he's current with his child support is a promise not to claim
the exemption herself.
Now, obviously it is--but it's a conditional promise. The rest of the Court
reasons thusly:
042
section 152(e)(2)(A) requires "a custodial parent's declaration that
she 'will not claim' the child as a dependent." See op. Ct. p. 9 (citing
sec. 152(e)(2)(A));
042
"This statement is unconditional." See id.;
042
"[I]n order for a document to comply with the substance of Form
8332 and ultimately section 152(e)(2)(A), the declaration on the
document must also be unconditional." See id.;
042
the language in Mr. Armstrong's form is conditional, see id. p. 10,
and therefore,

042
Mr. Armstrong's form does not conform to the substance of Form
8332 and section 152(e). See id. p. 12.

- 28 What has just happened is an assumption of the conclusion--the conclusion
to be proved is assumed to be the case in the third bullet point (and on page 9 of
the Court's opinion).
This is not a promising way to construe the language of the Code and
regulations. I would look at the problem altogether differently--this question
being one where "a page of history is worth a volume of logic." See New York
Trust Co. v. Eisner, 256 U.S. 345, 349 (1921). But to gain a better understanding

of the law in effect for the year at issue, I would begin in the present. As the
majority notes, the Commissioner would almost certainly win on the conditionality
question here if current section 1.152-4(e)(1), Income Tax Regs., as amended by

T.D. 9408, 2008-2 C.B. 323, 327, applied. That regulation states:
(i) In general.--The written declaration * * * must be an unconditional
release of the custodial parent's claim to the child as a dependent for
the year or years for which the declaration is effective. A declaration
is not unconditional if the custodial parent's release of the right to
claim the child as a dependent requires the satisfaction of any
condition, including the noncustodial parent's meeting of an
obligation such as the payment of support. * * *
(ii) Form designated by IRS.--A written declaration may be made on
Form 8332 * * * A written declaration not on the form designated by
the IRS must conform to the substance of that form and must be a
document executed for the sole purpose of serving as a written
declaration under this section. A court order or decree or a
separation agreement may not serve as a written declaration.

- 29 Id.; see also sec. 1.152-4(g), Examples (H), (H), Income Tax Regs. (as amended

by T.D. 9408, 2008-2 C.B. at 329).1
As the majority acknowledges, however, see op. Ct. note 6 and note 7, this
regulation does not apply for the 2007 tax year. See sec. 1.152-4(h), Income Tax
Regs. (as amended by T.D. 9408, 2008-2 C.B. at 329). That means that we have to
figure out what the law was before the regulation.
Apart from our caselaw, the first hint that conditions would make a

taxpayer's right to claim a dependency exemption ineffective came from a January
2006 revision to Form 8332. In the "[g]eneral [i]nstructions" for a "[p]ost-1984
decree or agreement" the Commissioner noted:
If the divorce decree or separation agreement went into effect after 1984,
the noncustodial parent can attach certain pages from the decree or
agreement instead of Form 8332. To be able to do this, the decree or
agreement must state * * * the following.

1. The noncustodial parent can claim the child as a dependent
without regard to any condition (such as payment of support).
1 Whether this regulation would survive review is a question for a later day.
Although the Secretary may well have legitimate reasons for limiting the scope of
what can serve as a written declaration, he must do so in a rational way. See

Judulang v. Holder, ___ U.S. ___, __, 132 S. Ct. 476, 485 (2011). Allowing a
custodial spouse to unilaterally revoke a noncustodial spouse's legal right to claim
a dependency exemption--by refusing to sign a Form 8332--raises a serious
question about the regulation's validity under an arbitrary-and-capricious
standard. That the regulation saves time and money won't necessarily salvage an
arbitrary agency policy. See id. at ___, 132 S. Ct. at 489-90.

- 30 Form 8332 (as revised January 2006). But neither IRS forms nor their instructions
are binding authority. See, e.g., Weiss v. Commissioner, 129 T.C. 175, 177
(2007). The use of such a form to create substantive tax law also creates serious
administrative-law problems. See Administrative Procedure Act, 5 U.S.C. sec.

553 (2006).
In any event, not long after this revision, the Secretary issued a notice of
proposed rulemaking to change section 1.152-4, Income Tax Regs., and
incorporate provisions of section 1.152-4T, Temporary Income Tax Regs., supra.
See Notice of Proposed Rulemaking, 72 Fed. Reg. 24192 (May 2, 2007). The
notice stated that changes to the regulation would in part be made to "provide
guidance on issues that have arisen in the administration of section 152(e)." Id.,
72 Fed. Reg. at 24193. One of these proposed changes
further provide[d] that a written declaration must include an
unconditional statement that the custodial parent will not claim the
child as a dependent for the specified year or years. A statement is
unconditional if it does not expressly condition the custodial parent's
waiver of the right to claim the child as a dependent on the
noncustodial parent's meeting of an obligation such as the payment of
support. * * *

Id.
The Secretary received a comment arguing that a divorce settlement agreed
to by both parents should still be able to serve as a standalone declaration. See

- 31 -

T.D. 9408, 2008-33 I.R.B. 323. He responded that requiring a Form 8332 or a
document specifically executed for that purpose improves tax administration and
reduces controversy. See id. at 325. To be sure, these are laudable goals. But this
sort of rule-crafting is his domain, not ours. Cf. Judulang v. Holder, ___ U.S. ___,
__, 132 S. Ct. 476, 489-90 (2011) (rejecting government assertion that regulation
"saves time and money" in invalidating an "arbitrary agency policy"). What's
telling about his actions, and relevant to the analysis of the state of the law before
section 1.152-4, Income Tax Regs., as amended by T.D. 9408, 2008-33 I.R.B. 323,
is that the Secretary believed he needed to redraft his regulation to ban
conditionality.

But was he correct?
A.

Congress's and the Commissioner's Views of Conditions

I would begin by noting that all noncustodial parents' claims to exemptions
for their children used to be conditional--conditional on the parent's providing
more than half the support for the child during the tax year. See sec. 152 (as in

effect before the Act of Aug. 31, 1967, Pub. L. No. 90-78, sec. 2, 81 Stat. at 192).
This set up enormously involved battles between former spouses about who spent
how much and for what and on whom, and Congress finally came to our Court's

- 32 relief after noticing that nearly five percent of all income-tax cases were of this

type. See H.R. Rept. No. 90-102 (1967), 1967-2 C.B. 590, 592.
Congress's first attempt at a solution was to add section 152(e) to allow
parents to allocate exemptions in a divorce decree or separation agreement. See
Act of Aug. 31, 1967, sec. 1, 81 Stat. at 191-92. It gave a noncustodial parent the
dependency exemption if the divorce decree or separation agreement awarded him
the exemption and he provided the child at least $600 of support in any given tax
year. The "overriding purpose" of the change was "to provide certainty to the
parties." McClendon v. Commissioner, 74 T.C. 1, 3 (1980) (citing S. Rept. No.

90-488 (1967), 1967 U.S.C.C.A.N. 1527, and H.R. Rept. No. 90-102, supra); see
also S. Rept. No. 90-488, supra, 1967 U.S.C.C.A.N. at 1529 ("[T]he bill * * *
amend[s] present law to provide a set of rules under which [the dependency
exemption] issue may be resolved on a basis that is more satisfactory to the
parents and which will alleviate the current administrative burden"). Yet

Congress still made the IRS's respect for that allocation conditional on the
noncustodial parent's providing at least $600 in child support--a condition that
would allow the kind of agreement Mr. Armstrong had with Ms. Delaney. See Act

of Aug. 31, 1967, sec. 1, 81 Stat. at 191-92. The legislative history of section
152(e) says that this would allow state courts "hearing divorce and separation suits

- 33 to resolve [the dependency exemption] issue in many cases at the time they are
considering the financial arrangements which are to apply between the parents and
to take the income tax deduction directly into account in this connection." S.
Rept. No. 90-488, supra at 1529. Congress also provided a second method for a
noncustodial parent to get the exemption: He could show that he spent at least
$1,200 on the child, but only if the custodial parent could not "clearly establish"
that she spent more on that child. See id. at 1528.
Our caselaw interpreting that version of section 152(e) confirmed that
conditionality in a separation agreement or a divorce decree did not prevent a
noncustodial parent from claiming the dependency exemption. See Flatt v.

Commissioner, T.C. Memo. 1986-495, 1986 WL 21704 ("[W]here a divorce
agreement CONDITIONS the claim for dependency exemptions upon the
performance of specific obligations, it is appropriate for this Court to determine if,
in fact, the party obligated to meet such conditions has fully complied"); Flautt v.

Commissioner, T.C. Memo. 1983-172, 1983 WL 14153 (analyzing whether
noncustodial parent had fulfilled the conditions of a separation agreement in
deciding whether he qualified for dependency exemption under section 152(e)(2)).
The second method by which the noncustodial parent could claim the
exemption, however, proved exceptionally contentious. See, e.g., Justin S. i

- 34 Holden, "The Domestic Relations Tax Act of 1984", 34 R.I. B.J. 11, 11 (1986)
("Under prior law the Tax Court was the scene of literally thousands of trials to
determine whether Mom or Pop was entitled to the $1,000 exemption for little
Johnny"). This spurred Congress to substantially revise section 152(e) in the

Deficit Reduction Act of 1984 (DEFRA), Pub. L. No. 98-369, sec. 423(a), 98 Stat.
at 799. During that overhaul, Congress collapsed the two exceptions into one:

SEC. 152. DEPENDENT DEFINED.
(e) Support Test in Case of Child of Divorced Parents, Etc.--

*

*

*

*

*

*

*

(2) Exception where custodial parent releases claim to
exemption for the year.--A child of parents described in
paragraph (1) shall be treated as having received over half of
his support during a calendar year from the noncustodial parent

if-(A) the custodial parent signs a written declaration
(in such manner and form as the Secretary may by
regulations prescribe) that such custodial parent will not
claim such child as a dependent for any taxable year
beginning in such calendar year, and

(B) the noncustodial parent attaches such written
declaration to the noncustodial parent's return for the
taxable year beginning during such calendar year.

Sec. 152(e)(2) (as amended by DEFRA sec. 423(a)). Congress eliminated the
troublesome $1,200-but-more-than-your-ex spending test, but grandfathered for

- 35 divorce decrees already in effect the old allocation-in-the-decree-plus-prove-morethan-$600-in-child-support test. See sec. 152(e) (as amended by DEFRA sec.

423(a)).
As the majority notes, see op. Ct. note 9, Congress's purpose in making
these changes was "to provide more certainty by allowing the custodial spouse the
exemption unless that spouse waives his or her right to claim the exemption."

H.R. Rept. No. 98-432 (Part 2), at 1499 (1984), 1984 U.S.C.C.A.N. 697, 1140.
Congress wanted more certainty because aspects of the law then in place were
"often subjective and present[ed] difficult problems of proof and substantiation."

Id. at 1498, 1984 U.S.C.C.A.N. at 1140. The majority takes this language and
says it was aimed at banking the fires from parents fighting over the first method
(the allocation-in-the-decree-plus-prove-more-than-$600 test) that we were having
to extinguish. See op. Ct. pp. 14-15 & note 9. But look at the very next sentence
from the House report: Congress emphasized instead that "[t]he Internal Revenue
Service becomes involved in many disputes between parents who both claim the

dependency exemption based on providing support over the applicable

thresholds." H.R. Rept. No. 98-432 (Part 2), supra at 1498, 1984 U.S.C.C.A.N. at
1140 (emphasis added). This language means Congress was pointing its fire
extinguisher at disputes under the second method, not the first. In other words,

- 36 Congress's concern leading up to the 1984 section 152(e) amendments was with
the yearly contests between parents on how much they spent on their kids, not on
conditional transfers of exemptions. Indeed, our caselaw has said as much. See
Caputi v. Commissioner, T.C. Memo. 2004-283, 2004 WL 2955865, at *1 (noting-without mentioning the first test--that the $1200-plus-who-spent-more-on-thechild test "put the Internal Revenue Service (IRS) in the middle of conflicts

between parents that were 'often subjective and [presented] difficult problems of

proof and substantiation'" (quoting H.R. Rept. No. 98-432 (Part 2), supra at 1498,
1984 U.S.C.C.A.N. at.1140)).
Congress expected that the requirement of getting a declaration would
increase the probability that noncustodial parents would keep current in their
payment of child support: "the declaration may be made by the custodial spouse
annually in order to better insure the receipt of child support payments." See H.R.

Rept. No. 98-432 (Part 2), supra at 1499, 1984 U.S.C.C.A.N. at 1141; see also
Rodney V. Nutt, Note, "Tax Law--The 1984 Amendment to I.R.C. § 152(e): Did
Congress Intend to Preempt a State Court's Authority to Allocate the Dependent
Child Exemption?", 14 W. New Eng. L. Rev. 59, 68-69 (1992) (noting state
supreme court's analysis that section 152(e)'s legislative history seemed to show
congressional desire "to enable a custodial parent to use the dependent child

- 37 exemption as an inducement" for paying child support); Roland L. Hjorth,
"Divorce, Taxes, and the 1984 Tax Reform Act: An Inadequate Response to an
Old Problem", 61 Wash. L. Rev. 151, 186 (1986)(suggesting the yearly approach
as an enforcement mechanism for the custodial parent); James A. Rodenberg,
"Allocating Federal Income Tax Dependency Exemptions in Divorce Decrees", 55
Mo. L. Rev. 1075, 1098 (1990) (suggesting same). Conditional language in a
divorce decree--an agreement that the noncustodial parent can claim dependency
exemptions if he pays the required child support--accomplishes the same end. The
annual declaration would seem to be little more than a receipt for the fulfillment of
that legally binding original promise.2
There is nothing in this history that suggests Congress thought it needed to
end conditional transfers of exemptions, or render them unenforceable at the whim
of the custodial parent. It just wanted to end the yearly contests between parents

on how much they spent on their kids--contests that had become the festivals of
litigation.

2 Congress had, a few years before, enacted section 6402(c), see Omnibus
Budget Reconciliation Act of 1981, Pub. L. No. 97-35, sec. 2331(c)(2), 95 Stat. at
860-61, which requires the Secretary to reduce the amount of a taxpayer's refund
by the amount of his delinquent support obligations and send the difference to the
state seeking to collect such obligations. This provision--also aimed at getting
child support paid--has remained substantively unchanged to this day. See sec.
6402(c).

- 38 A look at the Internal Revenue Manual (IRM) from around that time also
shows the Commissioner to be unconcerned with the conditionality of transferring
exemptions.3 Shortly after Congress enacted section 6402(c), the IRS developed a

"Child Support Refund Offset Program." IRM pt. 4(13)(25)0 (Dec. 23, 1986). As
part of its procedures for administering section 6402(c), the IRS notified a
taxpayer who was delinquent on his child-support obligations, but had
nevertheless claimed the dependency exemption, that he "may not have furnished

the necessary 50% support that would enable [him] to claim the dependent(s)
shown on [his] return." Ish pt. 4(13)(25)4(1) (Nov. 16, 1992). With its notice, the
IRS enclosed a questionnaire that solicited information which might substantiate
the taxpayer's case. See id. If he provided this "substantiation", the IRS had to

allow the exemption. Id. pt. 4(13)(25)4(2)(Nov. 16, 1992).4

3 The IRM doesn't carry the force of law, Rhone-Poulenc Surfactants &
Specialties, L.P. v. Commissioner, 114 T.C. 533, 543 n.16 (2000), but we can use
the IRM as persuasive authority of the Commissioner's interpretation of the Code
to guide our own evaluation, see id.
Foreshadowing the discussion in the next section, this part of the IRM also
speaks to the defmition of attachment. One section mentions a taxpayer
"submit[ting] [a] Form 8332" pursuant to the IRS's request for documentation; the
taxpayer would need to submit a Form 8332 only if he hadn't already provided a
declaration or a Form 8332 with his filed return. See IRM pt. 4(13)(25)4(3) (Nov.
16, 1992). The IRM required the taxpayer to substantiate his payment of child
support even if he submitted a Form 8332. See id. Nothing in this IRM part
(continued...)

- 39 B.

State Courts' Use of Conditions

Congress's and the Commissioner's lack of concern over conditions (such
as payment of support) isn't surprising. Then, as now, several states allowed-or
even required--courts to condition the allocation of dependency exemptions on the
noncustodial parent's payment of child support. Since at least 1999, for example.
Florida has required a divorce court's allocation of the dependency exemption to
be conditional upon the noncustodial parent's payment of child support. See 1999
Fla. Sess. Law Serv. ch. 99-359 (H.B. 145), sec. 1 (West) (currently codified at
Fla. Stat. Ann. sec. 61.30(11)(a)(8) (West 2012)). Alaska has had a similar law in
place since 1998. See 1998 Alaska Sess. Laws ch. 132 (H.B. 344), sec. 13
(currently codified at Alaska Stat. Ann. sec. 25.24.152(a) (West 2010)). And

Colorado as well, since at least 1992. See 1992 Colo. Legis. Serv. H.B. 92-130,
sec. 1 (West) (currently codified at Colo. Rev. Stat. Ann. sec. 14-10-115(12)
(LexisNexis 2012)). These states are by no means outliers.5 In states that have

4(...continued)
indicates that the IRS would ignore a taxpayer's late submission of a Form 8332.

5 Both Indiana and Minnesota also require the allocation of the dependency
exemption to a noncustodial parent to be conditioned on the payment of child
support. Ind. Code Ann. sec. 31-16-6-1.5(d)(LexisNexis Supp. 2012); Biscoe v.
Biscoe, 443 N.W.2d 221, 224-25 (Minn. Ct. App. 1989). Similarly, in Louisiana,
the courts cannot allocate the dependency exemption to a noncustodial parent if
(continued...)

- 40 such a requirement, the majority's holding will allow a custodial spouse who
refuses to sign a Form 8332 in violation of a divorce decree or separation
agreement to unilaterally prevent a noncustodial spouse from otherwise lawfully
claiming a dependency exemption.' I think it reasonable to conclude that our
holding today will upset expectations settled undèr state law. It is as if a
restaurant could defeat a taxpayer's deduction for a business dinner by not giving
him a receipt, even if he showed us the bill and a credit-card statement that
showed he paid it.

The rest of the Court reasons that the purpose of section 152's declaration
requirement was to ease the IRS's burden of enforcement. But I would conclude

5(...continued)
there are any outstanding child support payments owed to the custodial parent.
La. Rev. Stat. Ann. sec. 9:315.18(B)(1)(a) (2008). Though to my knowledge no
court has yet ruled on the issue, Louisiana's statute could be broadly read to
require the non-custodial parent to stay current on his support obligation in order
to keep the exemption. See id. Notably, I have found no state that disallows
conditioning the allocation of the dependency exemption on the noncustodial
parent staying current on his support obligations.
6 COmmentatorS have noted that just telling noncustodial parents in this
situation that their remedy lies in asking a state court to order an offsetting
reduction in future support if the custodial parent refuses to fill out a Form 8332
would cause collateral damage to the minor children who are supposed to benefit

from that support. See James A. Rodenberg, "Allocating Federal Income Tax
Dependency Exemptions in Divorce Decrees", 55 Mo. L. Rev. 1075, 1096-97
(1990).

- 41 that there is nothing in the history of DEFRA's language or apparent purpose to
suggest Congress had concluded that conditioning an exemption transfer on
payment of child support was too difficult to enforce. What we have--a widely
followed approach in terms of state statutory law on the subject--suggests that the
custodial-parent-declaration system was a low-cost and more certain way of
enforcing a noncustodial parent's support obligations, not a trap for the unwary
noncustodial parent like Mr. Armstrong who dutifully fulfills them. See Nutt,

supra, at 68-69. But see Hjorth, supra, at 186 (acknowledging the potential for
Mr. Armstrong's problem).
C.

Post-DEFRA Caselaw Regarding Conditions

So what happened with our caselaw after the 1984 amendments, and after
Flatt and Flautt (which both signaled approval of looking at whether a
noncustodial parent fulfilled the conditions in a separation agreement to decide

whether he qualified for a dependency exemption)? Here, again, there's another
page of history to read. It starts with the memorandum opinion, White v.

Commissioner, T.C. Memo. 1996-438, 1996 WL 540111. In White, a divorce
decree entitled the noncustodial parent to "claim the two * * * children of the
marriage as his beneficiaries for income tax purposes," and required the custodial
parent to execute whatever documents were necessary to enable the noncustodial

- 42 parent to claim dependency exemptions for the children. Id., 1996 WL 540111, at
*1. The custodial parent then signed a letter saying that the noncustodial parent
was indeed "entitled to claim the two * * * children of the marriage as his
beneficiaries for income tax purposes." Id. We held, however, that the
noncustodial parent couldn't take the dependency exemption because the letter
didn't "conform to the substance" of Form 8332. Id. at *3. But why? We first

noted that the letter failed to state the years for which the custodial parent was
releasing the claims for exemption, and also failed to state the Social Security
numbers for both parents--both requirements under the applicable regulation. Id.
We then stated--"most importantly"--that the letter failed to explicitly state that the

custodial parent would not claim either of the two children as her dependent. Id.
We went on to note that--although the divorce decree said that the noncustodial
parent was entitled to the dependency exemptions--"[s]tate courts, by their
decisions, cannot determine issues of Federal tax law." Id.
It's often hard to glean exactly what elements are essential to a taxpayer's
case when he loses for several different reasons. This is a part of tax law where a
great many working- and middle-class parents try to represent themselves and are

usually not very good at researching the development of caselaw and
distinguishing one precedent from another. This almost guarantees some

- 43 problems in reaching consistent results. We have held, somewhat contrary to
White, that the Social Security numbers of the parents--one of the blanks to fill in
on a Form 8332--are not essential to its substance. Bramante v. Commissioner,

T.C. Memo. 2002-228, 2002 WL 31039137, at *2-*3. (We have also held,
somewhat consistently with White, that not listing which tax years the custodial
parent is surrendering--another blank on that form--is fatal. See Santana v.

Commissioner, T.C. Memo. 2012-49, 2012 WL 571284, at *2; Briscoe v.

Commissioner, T.C. Memo. 2011-165, 2011 WL 2709582, at *3.) But the really
striking aspect of White is its statement--"[s]tate courts, by their decisions, cannot
determine issues of Federal tax law"--that implies that even a divorce decree that
unconditionally transfers exemptions to the noncustodial parent isn't good

enough.7 White, 1996 WL 540111, at *3.

7 This is a very broad generalization--state-court divorce decrees allocate
rights between parents. The characterization of those rights for federal tax-law
purposes remains a federal question, see, e.a., United States v. Nat'l Bank of
Commerce, 472 U.S. 713, 722 (1985), but many states and commentators view the
allocation of tax exemptions as very much one of the items that state courts can

and do regulate, see Robert G. Nassau, "How to Split the Tax Baby: What Would
Solomon Do?", 61 Syracuse L. Rev. 83, 107-109 (2010); see also Rodenberg,
supra, at 1084 ("[C]ourts routinely used their powers to allocate the exemption in
divorce decrees"). And for many decades the Code expressly allowed state courts
to allocate exemptions, as it still does for pre-1985 arrangements. See sec.
152(e)(3). A more precise formulation, therefore, is that a state-court allocation of
federal-tax exemptions between divorced parents can't bind the Commissioner.

- 44 Although the majority repeats this sweeping generalization, see op. Ct. pp.
12-13,8 even this part of White's holding seems not to have survived fully intact.
In another memorandum opinion, Boltinghouse v. Commissioner, T.C. Memo.
2003-134, 2003 WL 21078104 at *3-*4, we held (without acknowledging White)
that a state-court separation agreement did conform to the substance of Form
8332. Like the agreement in White, the agreement in Boltinghouse was an
unconditional transfer. Id. at *3. The important factor, Boltinghouse said, was

that there was no ambiguity about what years were covered. See id. at *3-*4; see

also, e.g., Loffer v. Commissioner, T.C. Memo. 2002-298, 2002 WL 31719896, at
*2 (signed divorce decree might suffice, but not one that doesn't specify which
children or tax years are covered). Ambiguity alone--not the use of a state-court

8 The majority quotes a T.C. opinion. See Miller v. Commissioner, 114 T.C.
184, 196 (2000) ("[A] state court cannot determine issues of Federal tax law"),
aff'd on other grounds sub nom., Lovejoy v. Commissioner, 293 F.3d 1208 (10th
Cir. 2002). Miller itself relied on White when it made that statement, and it was
not at all essential to our holding. In Miller, the noncustodial parent attached to
his return a state court order that unconditionally allocated to him the dependency
exemptions for both of his children. That order, however, wasn't signed by the
custodial parent. We held that the lack of a signature was the fatal flaw,

determining that "[s]imply attaching a State court order that is not signed by the
custodial parent to the return of the noncustodial parent does not satisfy the
express statutory requirements of section 152(e)(2)(A)." Id. Miller's statement
regarding state court determinations--besides being a broad generalization--would
seem to be dictum.

- 45 agreement, and not the presence or absence of Social Security numbers--is enough
to distinguish Boltinghouse from White.
The majority, however, uses Boltinghouse for an entirely different reason--

citing it as support for its holding requiring a declaration to be unconditional for a
noncustodial parent to claim the dependency exemption. See op. Ct. p. 9. I'm
hesitant, however, to glean that principle from Boltinghouse because conditionality was not at issue there. We focused instead on whether the agreement conformed to the substance of Form 8332 even though it didn't explicitly state the
years for which the dependency exemptions were to be released.' Boltinghouse's
holding didn't rely upon the unconditional nature of the transfer, and never
appeared to hint that the absence of conditionality was a prerequisite for a

declaration to conform to the substance of Form 8332.
Despite that context, our caselaw began to frequently cite Boltinghouse as a
prohibition of using divorce decrees with conditional clauses as substitutes

9 The Commissioner had also claimed in Boltinghouse that the agreement
didn't conform to the substance of Form 8332 because it didn't include the Social
Security numbers of the parents. T.C. Memo. 2003-134, at *4. We flatly rejected
that assertion as "without merit." Id. (citing Bramante v. Commissioner, T.C.
Memo. 2002-228, 2002 WL 31039137, which held that the omission of a custodial
parent's Social Security number on a declaration didn't invalidate the release).
But see Thomas v. Commissioner, T.C. Memo. 2010-11, 2010 WL 174107, at *3
(holding decree didn't conform to the substance of Form 8332 because--among
other reasons--it didn't contain parents' Social Security numbers).

- 46 substantially in the same form as Forms 8332. In Thomas v. Commissioner, T.C.
Memo. 2010-11, 2010 WL 174107, we said the dictum from Boltinghouse stood
for the rule that "only a release that is unconditional conforms to the substance of
Form 8332 and meets the requirements of section 152(e)(2)." Thomas, 2010 WL

174107, at *3.
The next case to take its inspiration from the "unconditional" language in
Boltinghouse was Gessic v. Commissioner, T.C. Memo. 2010-88, 2010 WL
1644694. Indeed, the majority cites Gessic to support its position that "the
Internal Revenue Service cannot be expected to police divorce decrees and
separation agreements or determine taxpayer compliance therewith." See op. Ct.
pp. 13-14 (quoting Gessic, 2010 WL 1644694, at *3). I'd like to put some context
around that statement.
Gessic is another case where there were multiple problems with the
noncustodial parent's evidence, including a failure to name the children involved.
Id. at *3. But in the course of denying the exemption to the noncustodial parent,
we distinguished Boltinghouse as arising from an unconditional transfer. Id. (In
Gessic, by contrast, the transfer of exemptions was until "such time as Ms. Gessic

returned to work full time and earned over $20,000 per year " Id.) This was true
as a factual matter, and it was important because the conditional language in the

- 47 Gessics' agreement created an ambiguity as to what tax years were applicable. We
could have added that "full time" and "earned over $20,000 per year" are not at all
clear in their meanings, but to be sure we reasoned instead these terms might
"change from year to year, such that petitioner's entitlement to the dependency
exemptions for his children is potentially subject to change each year." Id.; see

also, e.g., Horn v. Commissioner, T.C. Memo. 2002-290, 2002 WL 31662270, at
*2 (rejecting transfer of exemptions conditioned on the transfer "not interfer[ing]

with [the custodial parent's] ability to receive Federal Student Aid," but also for
failing to identify years involved).
What I would take away from Gessic and Horn is that ambiguous terms in a
divorce decree--terms with two or more possible meanings, such as "if it won't
interfere with the spouse's ability to get federal student loans" or "until the spouse
is working full time"--are too indefinite a description of the years for which a
custodial spouse is surrendering her children's exemptions. But ambiguity is not

the same as conditionality. And Congress has expressly contemplated annual
declarations to be a useful enforcement mechanism for timely payment of child
support, and the states themselves have been making (and in some cases, are
required to make) allocations of exemptions between divorcing spouses
conditional on payment of child support.

- 48 That leaves our nonprecedential caselaw from Thomas. I acknowledge it
uses a parenthetical to describe Boltinghouse as saying "only a release that is
unconditional conforms to the substance of Form 8332." Thomas, 2010 WL
174107, at *3. As explained earlier, however, conditionality was not at issue in
Boltinghouse, its holding didn't rely on the unconditional nature of the transfer,

and it didn't say that the presence of conditionality in a declaration is a bar
preventing it from conforming to the substance of Form 8332. As the only
habiliment with which Thomas cloaked its reasoning was its citation of that
dictum, the origins of Thomas's reasoning had no firm foundation in the statute,
its legislative history, or a regulation in effect at that time. I would not have given
it any weight.
D.

Whether the State Court Order Conforms to the Substance of Form
8332

It's important to remember here that the Commissioner stipulated that Mr.
Armstrong met his condition--he in fact paid his child support in full and on time.
When Mr. Armstrong satisfied that unambiguous condition precedent, Ms.
Delaney--according to the terms of the state court order--did not have a choice as
to whether she could claim the dependency exemption. She categorically did not

have a legal right to claim it.

- 49 The majority acknowledges that in this case it is easy to determine whether
the noncustodial parent satisfied the condition. See op. Ct. p. 14. But it says that
it is concerned with other cases where determining the fulfillment of the condition
"may be difficult and controversial." Id. If a case in the future arises where an
ambiguous condition again presents "difficult problems of proof and
substantiation," we should speak to that issue at that time. But that's just nöt the
case here. We shouldn't group Mr. Armstrong in with those other "difficult and

controversial" cases when his case has no such problems. And we should
definitely not hold that our conclusion is a plain-meaning construction.1°
By holding that Mr. Armstrong is not entitled to the dependency exemption,

the majority dishonors a state-court judgment ordering Ms. Delaney not to claim
the exemption and to provide Mr. Armstrong an executed IRS Form 8332 for

1997. The legislative history of section 152(e) explicitly acknowledges the
important role state courts play in allocating the dependency exemption via a court

1° Let's assume for a moment that the Secretary promulgated a regulation
that said--as an alternative to a Form 8332--a noncustodial parent can also satisfy
section 152(e)(2) by attaching to his return (1) a divorce decree/separation
agreement which allocates the exemption to him so long as he pays child support;
and (2) substantiation that he did, in fact, meet his child support obligatioris.
Under the majority's reasoning, that regulation would be invalid under step one of
Chevron, which says the plain meaning of a statute overrides regulations to the
contrary.

- 50 order, and nothing in the legislative history of the 1984 amendments suggests
anything to the contrary. The Armstrongs are not deadbeats trying to game the
system; they are honest taxpayers caught in the difficulties attendant to divorce-difficulties exacerbated by the lack of clear guidelines from the IRS and this
Court. Because Mr. Armstrong fulfilled the state court's unambiguous condition

to get the dependency exemption for C.E. for 2007, I don't think that condition
should be used to block him from claiming it. I would instead honor that statecourt order as conforming to the substance of Form 8332.
II.

Attachment

Just because the Armstrongs should win on conditionality doesn't mean
they necessarily can claim the dependency exemption for C.E. The Code also
requires that the noncustodial parent "attach" the signed declaration to his tax
return. See sec. 152(e)(2)(B); sec. 1.152-4T(a), Q&A-3, Temporary Income Tax
Regs., supra. As the majority notes (although doesn't resolve because of its
holding regarding conditionality), see op. Ct. note 4, the Commissioner argues that
the Armstrongs didn't comply with the attachment requirement because they
attached to their tax return only the May 2003 arbitration award, and not the
March 2007 court order that Ms. Delaney actually signed.

- 51 This immediately creates a problem for the Armstrongs because only the
arbitrator, and neither Ms. Delaney nor Mr. Armstrong (nor anyone like a lawyer
who might have been empowered to act on their behalf) signed this 2003 award,
and section 152(e)(2) requires a signed declaration. This means that the unsigned
2003 arbitration award fails to transfer the dependency exemption from Ms.
Delaney to the Armstrongs. If the record stopped here, the Armstrongs would lose.

See, e.g., Himes v. Commissioner, T.C. Memo. 2010-97, 2010 WL 1780877, at *2*3 (holding an unsigned divorce decree is insufficient to transfer dependency
exemption); Neal v. Commissioner, T.C. Memo. 1999-97, 1999 WL 167689, at *3
(finding unsigned Form 8332 insufficient to transfer dependency exemption).
But--as has already been detailed--the record doesn't stop here. The
Armstrongs provided two additional relevant documents to the Commissioner
during the examination of their 2007 tax return, including the 2007 child support
order that is at the core of the dispute over conditionality.

The Commissioner says that the 2007 order fails--not only on the
conditionality issue--but also because the Armstrongs didn't attach it to their
return. Like the conditionality argument, the Commissioner's position regarding
attachment has some support in our caselaw, but not in any precedential Opinion.
So as with the conditionality issue, I would take a closer look.

-52 Section 152(e)(2)(B) specifically commands that "the noncustodial parent
attach[] such written declaration to the noncustodial parent's return for the taxable
year." This might seem to have an obvious meaning--at first glance "attach" might
mean something like "staple" or "bind with a paper clip" or some other synonym
connoting "physically fasten." Judge Goeke thinks so, and in his concurrence says
that this means the Armstrongs "[c]learly * * * did not attach the relevant
document to their return." See concurring op. p. 21.

But that's not the only meaning of the word and, in an age where the IRS
strongly encourages filers, especially middle-income filers with relatively simple
returns, to file electronically, see Internal Revenue Restructuring and Reform Act

of 1998, Pub. L. No. 105-206, sec. 2001(a), 112 Stat. at 723 (establishing a goal for
electronic filing of at least 80% of Federal tax and information returns by 2007), I

explore in more detail that simple word.
Like any other word in the Code, we normally would give "attach" its plain
meaning. See Armstrong v. Commissioner, 99 T.C. 506, 507 (1992), aff'd, 15 F.3d
970 (10th Cir. 1994). According to Webster's Third New International Dictionary
140 (1961), however, "attach" has more than one:
042 "connect: place so as to belong" (as in through marriage, he attached
himselfto the Catholicfaith);

- 53 042 "to fasten (itself)" (as in though his resume omitted the details, the
sordid details ofhis embezzlement conviction werefirmly attached to
his reputation);

042 "make fast or join (as by string or glue)" (as in with the driver side
door no longer attached to his car, Billfound the heating unit wholly
ineffective); or
042 "to connect by attribution" (as in please see the attached Word
document)."

" Webster's Third New International Dictionary is widely regarded as a
"descriptive" dictionary--one that describes various word usages without
prescribing any. See Phillip A. Rubin, "War of the Words: How Courts Can Use
Dictionaries in Accordance with Textualist Principles", 60 Duke L.J. 167, 183-84
(2010). Lexicographers still debate whether the descriptive approach taken by
Webster's Third is more appropriate than a "prescriptive" approach--one
emphasizing the "proper" use of words--as employed by other respected
dictionaries, such as The American Heritage Dictionary. See id. at 183-84 n.105.
For what it's worth, the two dictionaries track each other as to the meaning
of "attach". The American Heritage Dictionary of the English Language 115 (5th
ed. 2011), in relevant part, defines attach as: (1) "To fasten, secure, or join" (as in
"attached the wires to the post"); (2)"To connect as an adjunct or associated
condition or part" (as in "Many major issues are attached to this legislation"); (3)
"To affix or append; add" (as in "attached several riders to the document"); (4)
"To ascribe or assign" (as in "attached no significance to the threat"); (5)"To bind
by emotional ties, as of affection or loyalty" (as in "I am attached to my family");
and (6)"To adhere, belong, or relate" (as in "Very little prestige attaches to this
position").

- 54 It makes a big difference to the Armstrongs if "attach" means "physically fastened"
and not simply "connected". Since the plain meanings vary so widely, and lead to
such different outcomes here, I would look elsewhere for guidance."
Since the meaning of the word "attach" isn't plain, I start with legislative
history, which can be a good lexicographical source. See Intermountain Ins. Serv.

of Vail, LLC v. Commissioner, 134 T.C. 211, 237-38 (2010) (Halpern and Holmes,
JJ., concurring in the result), rev'd on other grounds, 650 F.3d 691 (D.C. Cir.

2011), vacated and remanded, __ U.S. ___, 132 S. Ct. 2120 (2012).
Congress appears to have intended that "[w]here one of the parents claims

the deduction with respect to a child pursuant to a written agreement between them,
the Treasury Department may require that reasonable substantiation of the

existence of the written agreement be submitted with his tax return." H.R. Rept.

No. 90-102, at 1529, 1967-2 C.B. at 592 (emphasis added). It also delegated
authority to the Secretary to issue regulations, see id., which he did in 1971. They

provide that:
[I]n the case of a written agreement * * * between the parents which
allocates the deduction to the noncustodial parent, the noncustodial
° The Supreme Court has used dictionaries to "provide potential meanings
from which the Court would select based on statutory purpose, legislative intent,
common sense, or some other contextual argument." See Note, "Looking It Up:
Dictionaries and Statutory Interpretation," 107 Harv. L. Rev. 1437, 1439 (1994).

- 55 parent must attach to his return (or amended return) a copy of such
agreement * * * which is applicable to the calendar year in which the
taxable year of the noncustodial parent begins.

Sec. 1.152-4(d)(2), Income Tax Regs. (as amended by T.D. 7099, 1971-7 C.B. 45,
47) (emphasis added). Section 152(e)(2) and its regulations remained
substantially unchanged until Congress enacted DEFRA in 1984. See DEFRA

sec. 423, 98 Stat. at 799. As I detailed above, Congress collapsed two exceptions
into one, substituting more or less the language of section 152(e) as it is today.

The Secretary followed this lead and issued a new temporary regulation that
reflected the changes to section 152(e)(2):

Q-3 How may the exemption for a dependent child be claimed by a
noncustodial parent?
A-3 A noncustodial parent may claim the exemption for a dependent
child only if the noncustodial parent attaches to his/her income tax
return for the year of the exemption a written declaration from the
custodial parent stating that he/she will not claim the child as a
dependent for the taxable year beginning in such calendar year. The
written declaration may be made on a form to be provided by the
Service for this purpose. Once the Service has released the form, any
declaration made other than on the official form shall conform to the
substance of such form.

Sec. 1.152-4T(a), Q&A-3, Temporary Income Tax Regs., supra.
One theme that emerges from this mixed history is that Congress and the

Commissioner grew increasingly concerned about inefficiencies and uncertainties

- 56 surrounding the dependency exemption, seeking to avoid expensive litigation
where there was "little tax revenue at stake." H.R. Rept. No. 98-432 (Part 2),

supra at 1498-99, 1984 U.S.C.C.A.N. at 1139-40. Adopting the narrowest
meaning of "attaches"--i.e., physically fastens to--would advance efficiency
because the IRS could, for example, decide to deny exemptions to every
noncustodial parent who e-filed and there might be nothing a court could do about

it. And the fact that the term entered the Code when the World Wide Web was
little more than a pixel on Timothy Berners-Lee's mental monitor might mean
taxpayers are stuck with a meaning of "attaches" as "physically fastens
contemporaneously with filing."
But I think that there is a better reading.

Congress itself referred to "reasonable substantiation," see H.R. Rept. No.

90-102, at 1529, 1967-2 C.B. at 592 (emphasis added), and the Commissioner's
nod to "amended return[s]" indicates that the possibility of noncontemporaneous

"attachment" has always existed, see sec. 1.152-4(d)(2), Income Tax Regs. (as
amended by T.D. 7099, 1971-1 C.B. at 46)(emphasis added). This is especially
suggestive because amended returns are not returns that the Commissioner has to
accept, and are often little more than claims for a refund. See Koch v. Alexander,
561 F.2d 1115, 1117 (4th Cir. 1977)(no statutory mandate for Commissioner to

- 57 accept amended returns); Goldstone v. Commissioner, 65 T.C. 113, 115 (1975)
(rejecting taxpayers' argument that they have the "right" to file an amended return);
sec. 301.6402-3(a)(5), Proced. & Admin. Regs. (properly executed amended return
treated as claim for refund). And later congressional comments about the problems
with old section 152(e)'s income-support thresholds and dueling claims about
which parent provided the greater amount of support likewise undercut any
conclusion that "attaches" had only a narrow meaning in 1984. See H.R. Rept. No.

98-432 (Part 2), supra at 1498-99, 1984 U.S.C.C.A.N. at 1139-41. This should
make one reluctant to read "attaches" as having a plain meaning, especially when
doing so would deprive the Secretary of discretion under the first step of Chevron
to adopt a broader reading and would put well-meaning but unsophisticated and
unrepresented taxpayers at a great disadvantage.
But if the dictionary and legislative history don't compel a narrow reading,
and there is no regulation defining the word, where else could one turn7 The
Code does not define "attach", and has few references to the term." These sections

" In the sense in which the word is used in section 152(e)(2)(B), I can find
only fifteen current Code references to "attach" or "attachment": six in subtitle A,

see secs. 36(d)(4), 152(e)(2)(B), 170(f)(11)(C) and (D), 274(h)(5), 646(c)(2)(B),
860(e)(4); one in subtitle B, see sec. 2001(f)(2); and eight in subtitle F, see secs.

6038D(a), 6103(b)(1), 6114(a)(1), 6213(g)(2)(P)(iii), 6501(c)(9),
6611(g)(2)(B)(ii), 6662(d)(2)(B)(ii)(I), 7477(a).

- 58 unfortunately emit no more light than the legislative history. Other Code sections
appear to give "attach" a variety of meanings.
Some, such as current section 36(d)(4), are quite strict. Section 36
provides first-time homebuyers a credit for part of the purchase price of their
qualifying principal residence. Subsection (d)(4) specifies that "[n]o credit * * *
shall be allowed to any taxpayer for any taxable year" if "the taxpayerfails to
attach to the return of tax for such taxable year a properly executed copy of the
settlement statement used to complete such purchase." Sec. 36(d)(4)(as amended
by the Worker, Homeownership, and Business Assistance Act of 2009, Pub. L. No.

111-92, sec. 12(b), 123 Stat. at 2991) (emphasis added). Current section
6213 allows the Commissioner to summarily assess a tax deficiency arising from
a taxpayer's failure to attach the settlement statement. See sec. 6213(b),
(g)(2)(P)(iii) (as amended by the Worker, Homeownership, and Business
Assistance Act of 2009 sec. 12(b)). And while Congress hasn't further clarified
section 36(d)(4)'s attachment requirement, the National Taxpayer Advocate, in
testimony before the Senate Finance Committee, noted that section 36(d)(4)'s
requirement of upfront substantiation to get the first-time homebuyer credit is

burdensome and may reduce taxpayer participation. See Complexity and the Tax
Gap: Making Tax Compliance Easier and Collecting What's Due: Hearing

- 59 Before the S. Comm. on Fin., 112th Cong. 31 (2011) (statement of Nina E. Olson,
National Taxpayer Advocate).
Likewise, the December 2011 revision of the form given by the
Commissioner to claim the credit, Form 5405, First-Time Homebuyer Credit and
Repayment of the Credit, warns taxpayers about the credit's strict requirements:
"Caution! You must attach a copy of the properly executed settlement statement

(or similar documentation) used to complete the purchase (see instructions)." The
accompanying instructions add that a taxpayer filing a return claiming the section
36(d)(4) credit "must file on paper and attach all required documentation."
Other sections are much looser. Section 170, for instance, allows taxpayers
a deduction for their charitable contributions. Subsection (f)(11), however,

generally disallows a deduction for any contribution of more that $500 unless the
taxpayer substantiates the gift. See sec. 170(f)(11)(A). Subparagraphs (C) and

(D) of section 170(f)(11) go further: They disallow the deduction unless the
taxpayer "attaches" a qualified appraisal to his tax return. See sec. 170(f)(11)(C)
and (D). But taxpayers needn't fasten this qualified appraisal to claim their
deduction--so long as they provide it to the Commissioner within 90 days of his
asking for it. See sec. 1.170A-13(c)(4)(iv)(H), Income Tax Regs. Here, "attach"

- 60 doesn't mean "fasten"--unlike what seems to be the case with current section

36(d)(4).
I think it helpful, on this subject where Congress seems to have been
concerned about administrability, to also look at the IRM. Two sections of the
IRM in effect when the Armstrongs filed their return and when they were audited
seem particularly important to solving our problem."

IRM pt. 21.6.1.4.2 (Oct. 1, 2007) explains the Commissioner's general
procedures when dealing with "[r]eturns [w]ith [m]issing [i]nformation." It

instructs return reviewers to "request[] the necessary information if * * *
[s]upporting forms, schedules, or documents are missing."15 See id. Another part

of the IRM dealing with dependency exemptions is even more explicit:

IRM 21.6.1.5.8 (10-01-2002)
Verifying Form 8332 Procedure
" I am aware that the IRS Office of Chief Counsel has taken the position
that section 6330(c)(1)'s requirement that an Appeals officer obtain "verification
that 'the requirements of any applicable law or administrative procedure have been
met'" in collection cases includes verification that the IRS followed procedures
the IRM requires. Chief Counsel Advice 201212018 (Mar. 23, 2012); see also
Trout v. Commissioner, 131 T.C. 239, 257-62 (2008)(Marvel, J., concurring).
" The IRM clarifies that returns with potential statute-of-limitations
problems are "never returned to the taxpayer." IRM pt. 21.6.1.4.2 (Oct. 1, 2007).
We don't have this problem here: The Commissioner was well within the general
three-year limitations period when the Armstrongs filed their petition with this
Court.

- 61 -

*
3.

5.

*

*

*

*

*

*

Upon receipt of a math error notice response concerning a
missing or incomplete Form 8332 (or similar statement) take
the following actions:

*

*

*

C.

Correspond with the noncustodial parent; enclose
a blank Form 8332.

D.

Request taxpayer to complete and return the Form;
8332, signed by the custodial parent.

E.

Tell taxpayer IRS will reconsider the request when
the appropriate information is provided.

*

*

*

*

*

*

*

*

*

*

*

If taxpayer provides the appropriate documentation, allow the
exemption * * * [Id, pt. 21.6.1.5.8 (Oct. 1, 2002).]

The IRS has consistently followed such practices.16 Around the time section
152 was amended, the IRM Classification Handbook" contained "[s]tandard

[i]nformation [p]aragraphs," which solicited information from taxpayers "[t]o help

16 The IRS seems to have followed this practice of requesting additional
information regarding a taxpayer's entitlement to a dependency exemption where
it hadn't already been provided. See Kina v. Commissioner, 121 T.C. 245, 246-47
(2003) (noting the IRS requested a Form 8332 for tax year 1987 after the taxpayer
had filed the return claiming the dependency exemption).
" IRS examiners assigned to classification were required to follow the IRM
Classification Handbook. IRM pt. 41(12)0 (Nov. 1, 1984).

- 62 [the IRS] complete the examination" of their tax returns. IRM pt. 41(12)0,
Classification Handbook, ex. 900-2 (May 9, 1994). With regard to a claim for
"other dependents"--dependents for whom the taxpayer lacked custody--the IRS
would request a copy of "any written agreement stating which parent will have
custody and/or claim the dependency exemption" or a Form 8332 "or similar
statement." See id.

Current IRS procedure also underscores the Commissioner's interpretation
of "attach". The IRM part dealing with "[1]oose [s]chedules"i8 says they are not
rejected outright but are associated (or reassociated) with the return they relate to:
2.

Upon receipt of a loose schedule * * * do one of the following:

*

*

*

C.

If you want the loose schedule attached to the
original return and not returned to you, enter the
employee number for Files * *. *

*

*

E.

If the loose schedule relates to a prior year return
or for a return that should have already posted,
research for DLN. If DLN is found, enter it on the

*

. *

*

*

*

*

*

*

*

18 Loose schedules are schedules "that have inadvertently been detached
from, or cannot be associated with, a return * * * [or have been] received from
taxpayers without sufficient information to indicate why they have been sent."
IRM pt. 21.3.3.5.2 (Dec. 8, 2010) (emphasis added).

- 63 schedule and route it to Return Files function
to associate with return. If DLN is NOT found,
return the loose schedule to taxpayer.

IRM pt. 21.3.3.5.2 (Dec. 8, 2010).19 In these subsections, "attached" is
synonymous with "associated"--subsection (2)(C) mentions loose schedules' being
sent to "Files" to be "attached" with their return, and subsection (2)(E) describes
loose schedules for prior year returns' being sent to "Files" to be "associate[d]"
with their return. See id. In an age of email and e-filing, with physical documents
converted into electrons and sent instantaneously across the world, the
Commissioner can hardly be faulted for taking such a pragmatic view.20
These sections indicate that, informally at least, the Commissioner adopts a
less rigid definition of "attach"--not just "fastened" but "associated with" or
"connected to by attribution." I believe the part of the IRS bureaucracy that
handles the processing of returns has a perfectly reasonable understanding of the

19 DLN means "document locator number" in taxspeak. See, e.a.,
Kovacevich v. Commissioner, T.C. Memo. 2009-160, 2009 WL 1916351, at *8.
20 The Commissioner even has a form, Form 8453, U.S. Individual Income
Tax Transmittal for an IRS e-file Return, that he uses for paper tax forms like the
Form 8332 that have to be "associated with" their electronically filed returns. See
TIGTA Rept. 2006-30-160, "Requiring Personal Identification Numbers for
Electronically Filed Returns Could Improve Tax Administration and Reduce
Costs", Doc 2006-20471, 2006 TNT 192-22 (Sept. 2006).

- 64 word. For purposes of section 152(e)(2), this less-rigid definition of attach would
not undermine the clarity of the law, and it would allow legitimate taxpayer
claims to be heard and evaluated--without substantially impairing the efficiency
of the Commissioner's processing and collection activities. I am mindful that we
generally should construe deductions narrowly. INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992). But we aren't confronted here with the

scope of a deduction: We address only a procedural rule for examining whether a
taxpayer may claim the section 152(e)(2) exemption.
That again leaves our nonprecedential caselaw. We have consistently

noted section 152(e)(2)'s attachment requirement. See, e.a., Himes, 2010 WL

1780877, at *2; Neal, 1999 WL 167689, at *3-*4. And I agree with Judge Goeke
that we have plenty of nonprecedential caselaw implicitly defining "attach" as
"physically fasten to." In many cases involving section 152(e)(2), a taxpayer
failed to staple a Form 8332 or declaration to his return but then provided

additional support during audit or trial. We've looked at this additional
documentation but concluded that, even if we considered it, it didn't comply with
section 152(e)(2)'s other requirements. See, e.a., Santana, 2012 WL 571284, at

*2; Norwood v. Commissioner, T.C. Memo. 2003-63, 2003 WL 751016, at *3;
Horn, 2002 WL 31662270, at *1-*2. In other cases, however, we've refused to

- 65 look at the later-provided materials not fastened to the initial tax return. See, e.a.,

Espinoza v. Commissioner, T.C. Memo. 2011-108, 2011 WL 1989733, at *1-*2
(taxpayer provided permanent order of child support, but we didn't analyze
whether it satisfied section 152(e)(2) requirements); Brissett v. Commissioner,

T.C. Memo. 2003-310, 2003 WL 22520105, at *1, *3 (taxpayer provided
voluntary separation and property settlement agreement, but we didn't analyze
whether it satisfied section 152(e)(2) requirements). We didn't parse "attaches"
in these cases, and it appears--as is so often true in subjects where pro se
taxpayers predominate--that we did not have any argument from any of the parties

in any of the cases about broad or narrow readings of the word. We appear to
have simply assumed a narrow reading--"attaches" as "contemporaneously
fastens"-and applied that reading to the facts of the case at hand.
In only a few cases did we address the attachment requirement head on. In

Chamberlain v. Commissioner, T.C. Memo. 2007-178, 2007 WL 1953154, at *1,
the taxpayer attached to his 1995 income tax return an original copy of an
executed Form 8332 releasing his ex-wife's claim to the dependency deductions
for all future years. A fire then destroyed all his copies of the document, and in
later years he included a note with his income tax return referring to the original
form. See id. The Commissioner didn't challenge Chamberlain's claim to a

- 66 dependency exemption, despite his failure to attach a copy of the form to his tax
returns for any of the years between 1996 and 2002. See id. Things changed in
2003: His ex-wife also claimed the exemption that year, and the Commissioner
rejected Chamberlain's exemption claim to avoid getting whipsawed. See id.
Chamberlain challenged the Commissioner's determination and produced at trial
a letter from his ex-wife confirming the prior existence of the Form 8332, even
though he couldn't locate a copy. See id., 2007 WL 1953154, at *3. While
sympathetic to his plight, we sided with the Commissioner, holding that his note
and letter didn't satisfy section 152(e)(2) and the prior existence of a Form 8332
didn't matter--he needed to attach a copy of it every year to his tax return or he
couldn't take the exemption. See id.
Chamberlain is distinguishable from this case. We are not dealing with the
problems caused by the destruction of important records, but instead the problem
of whether an existing record complies with the manner-and-form requirements of

section 152(e)(2). Whereas Chamberlain produced no additional forms or
declarations at or before trial, the Armstrongs gave the Commissioner the 2003
child support order and its 2007 modification. Chamberlain can just as easily be

seen as a failure-of-proof case as it can be read for a narrow reading of "attaches".

- 67 Presley v. Commissioner, T.C. Memo. 1996-553, 1996 WL 732832, also
tackled the attachment issue. The taxpayer there apparently claimed the
dependency exemption without providing any supporting documentation. See id.,
1996 WL 732832, at *2. He provided an executed Form 8332 at trial, but the
Form was dated February 8, 1994--almost a year after the day he filed his income
tax return. See id. We refused to accept the late Form 8332 because it wasn't
attached to his return and was dated after he filed the relevant tax return. Sée id.
I would view this rejection as akin to our reluctance to accept after-the-fact
evidence purporting to substantiate various business expenses--unless a record is
contemporaneous, we can't be sure it accurately reflects conditions as they
existed at the time the expense was incurred. See Barton v. Commissioner, T.C.
Memo. 2005-97, 2005 WL 1022957, at *3-*4 (expressing "skeptic[ism]" over
allegedly substantiating records that were "reconstructed * * * over 2 years after

the year in issue").
Mr. Armstrong didn't create a record after his case had begun. Instead, he

dug out records the IRS asked for--the 2003 and 2007 child support orders--both
of which were in effect when he filed his 2007 income tax return.
I would hold that "attaches" in section 152(e)means "associates with" or
"connects to by attribution." I am convinced that this is the most reasonable way

- 68 to read the section in light of the regulations contemporaneous with the
amendment that suggest that attachment to a later filed amended return would
suffice, the current administrative practice that encourages IRS agents to ask
taxpayers for missing Forms 8332 when those forms are not physically fastened
to the original return, and the practical impossibility of such a narrow reading in
an era where the IRS is publicly and successfully encouraging taxpayers to file
electronically. This construction of "attaches" goes against nothing either
Congress or the Secretary has said. If either wishes to clarify through amendment
to the Code or by regulation what "attaches" means, either is free to do so. Until
then, I would understand the term to mean providing a Form 8332 or similar
declaration to the Commissioner or this Court within the time for submitting
materials that can be "associated with" a given return in a case before us.
It is one of the great theorems of law that if all sides are rational actors with
perfect knowledge and zero transaction costs, the allocation of resources--even
including exemptions, child tax credits, and the like--would be the same
regardless of the rules we choose. See Ronald H. Coase, "The Problem of Social
Cost", 3 J.L. & Econ. 1 (1960). But in our fallen world, there are few stages on

which rational actors are more outpeopled by the children of wrath than in
domestic-relations law. The rest of the Court solves this case with a rule drawn

- 69 against any taxpayer who tries to use, as the substantial equivalent of a Form
8332, a divorce decree or separation agreement in which the allocation of a
dependency exemption includes a condition. This is a bright line. Bright lines
are usually a good thing for tax law, which is speckled with multifactor tests for
everything from the definition of an employee, see, e.g., Ewens & Miller, Inc. v.
Commissioner, 117 T.C. 263, 270 (2001) (seven factors), to whether a transaction
is a sale, see, e.g., Grodt & McKay Realty, Inc. v. Commissioner, 77 T.C. 1221,
1237-38 (1981) (eight factors), to the equity of granting innocent-spouse relief,

see, e.a., Henson v. Commissioner, T.C. Memo. 2012-288, 2012 WL 4815166, at
*6-*7 (applying factors listed in Rev. Proc. 2003-61, sec. 4.03, 2003-2 C.B. at
298-299) (at least eight factors), to figuring out whether an activity is engaged in
for profit, see, e.a., Foster v. Commissioner, T.C. Memo. 2012-207, 2012 WL

3000350, at *5 (applying factors listed in sec. 1.183-2(b), Income Tax Regs.)
(nine factors), and to deciding if a taxpayer committed fraud, see, e.a.,
Niedringhaus v. Commissioner, 99 T.C. 202, 211 (1992) (eleven factors).
Maybe, with the bright line we draw today, more separated parents will hire
escrow agents to manage the flow of Forms 8332. See Robert S. Taft, Tax
Aspects of Divorce and Separation, sec. 5A.02[1], at 5A-14 n.14 (rev. 2005)
(suggesting that custodial parent execute Forms 8332 to be held in escrow until a

- 70 third party verifies timely payment of child support). Maybe state courts will
grant the Mr. Armstrongs of the world a right to offset their future child-support
payments with the value of the tax benefits they have unjustly been denied. But
see supra note 5. Maybe we will see more gruesome spectacles of contempt and
threats ofjail like that we describe in George v. Commissioner, 139 T.C. _
(Dec. 19, 2012). Or maybe the Secretary, Congress, or our reviewing courts will
decide that the more reasonable course is to read the Code to ensure that

conditions on allocating the tax benefits of parenthood--conditions that Congress
expected to continue when it enacted section 152(e), conditions that several states
require as part of their family law, and conditions that parents assume in good

faith are enforceable and effective will, if a parent like Mr. Armstrong fulfills
them, be honored. I would have held that the Armstrongs attached the 2007 state
court order--a declaration that, in my view, conformed to the substance of Form
8332--to their return and would have allowed them to take the dependency
exemption for C.E. in 2007.
I respectfully dissent.
HALPERN and VASQUEZ, L[., agree with this dissent.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Atax-court%3A542589644d2549c6. Public record. Not legal advice.