4 IRS Forms to Know if You’re Getting a Divorce

4 IRS Forms to Know if You’re Getting a Divorce

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divorce couple cartoonIn all but the simplest of cases, divorce law is about finances. And when finances are involved federal tax law rears its ugly head.

But some divorce attorneys don’t pay enough attention to the tax consequences of the property settlements and alimony arrangements they negotiate for their clients.

Here are 4 important tax forms that every divorce lawyer should be aware of and conversant with (click on the sub-title to download the form):

IRS Form 2120 – Multiple Support Declaration  

Use the Multiple Support Declaration if you are claiming someone other than a qualifying child as a dependent and there are two or more people including yourself who provide support for the dependent.

If you have a regular dependent (qualifying child) such as your son or daughter under age 19, you don’t need to file the Form 2120. The exact definition of a qualifying child is a child who is your son, daughter, stepchild, foster child, brother, sister, stepbrother, or a descendant of any of them such as a grandchild, niece, or nephew who was under age 19 at the end of 2008 or under age 24 and a student or any age and permanently and totally disabled who did not provide over half of his or her own support for 2008.

The divorce attorney for the spouse who is going to be allowed the dependency exemption must make sure this form is properly completed and signed by both spouses to ensure that his client gets the exemption.

If he does not do this, his client could lose the exemption in the event of an IRS audit or if the other spouse also claims the dependent. 

IRS Form 8332 – Release of Claim to Exemption 

For tax years beginning after July 2, 2008 (the 2009 calendar year for most taxpayers), new rules apply to allow the custodial parent to revoke a release of claim to exemption that was previously released to the noncustodial parent on Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, or similar form.

The revocation is effective no earlier than the tax year beginning in the calendar year following the calendar year in which the custodial parent provides, or makes reasonable efforts to provide, the noncustodial parent with written notice of the revocation.

Therefore, if the custodial parent provides notice of revocation to the noncustodial parent in 2009, the earliest tax year the revocation can be effective is the tax year beginning in 2010. You can use Part III of Form 8332 for this purpose. 

You must attach a copy of the revocation to your return for each tax year you claim the child as a dependent as a result of the revocation. 

IRS Form 8857 – Request for Innocent Spouse Relief

When you sign a joint tax return with your spouse you are jointly and severally liable for the tax, penalty and interest shown due on the return and for any assessments arising from a later audit of that return.

In certain clearly defined cases, a spouse can get relief from this joint and several liability.

There are two types of relief available to so called “innocent” spouses:

  1. Innocent Spouse Relief and
  2. Equitable Relief

Divorce attorneys must have a thorough understanding of the innocent spouse and equitable relief rules in order to properly advise their clients and negotiate the terms of the divorce settlement.

For a more detailed discussion of Innocent Spouse/Equitable Relief see Tax Relief for Innocent Spouses: The Basics.

IRS Form 8379 – Injured Spouse Claim and Allocation 

Injured spouse relief is different from innocent spouse relief.

When a joint return is filed and the refund is used (or expected to be used) to pay one spouse’s past-due child and/or spousal support, a past-due federal debt, or past-due state income tax, the other spouse may be considered an injured spouse.

The injured spouse can claim his or her share of the refund using Form 8379, Injured Spouse Claim and Allocation.

To be considered an injured spouse, you must have:

  • Filed a joint return,
  • Received income (such as wages, interest, etc.),
  • Made tax payments (such as withholding or estimated tax payments),
  • Reported the income and tax payments on the joint return, and
  • An overpayment, all or part of which was applied to the past-due amount of the other spouse.
About Peter Pappas

Peter is a tax attorney and certified public acccountant with over 20 years experience helping taxpayers resolve their IRS and state tax problems.

He has represented thousands of taxpayers who have been experiencing difficulty dealing with the Internal Revenue Service or State tax officials.

He is a member of the American Association of Attorney-Certified Public Accountants, the Florida Bar Association and The Florida Institute of Certified Public Accountants and is admitted to practice before the United States Tax Court, the United States Supreme Court, U.S. District Courts - Middle District of Florida

Comments

  1. Thanks for providing this info. In divorce, you’ll need Divorce Forms, you can get them at forms.com.

  2. Thank you for the tips. Now the only thing left to do is to find out how to file divorce papers in Los Angeles.