[Federal Register Volume 72, Number 84 (Wednesday, May 2, 2007)]
[Proposed Rules]
[Pages 24192-24196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-8378]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 72, No. 84 / Wednesday, May 2, 2007 / 
Proposed Rules  

[[Page 24192]]



DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-149856-03]
RIN 1545-BD01


Dependent Child of Divorced or Separated Parents or Parents Who 
Live Apart

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document contains proposed regulations relating to a 
claim that a child is a dependent by parents who are divorced, legally 
separated under a decree of separate maintenance, separated under a 
written separation agreement, or who live apart at all times during the 
last 6 months of the calendar year. The proposed regulations reflect 
amendments under the Working Families Tax Relief Act of 2004 (WFTRA) 
and the Gulf Opportunity Zone Act of 2005 (GOZA).

DATES: Written or electronic comments or a request for a public hearing 
must be received by July 31, 2007.

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-149856-03), Room 5203, 
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, 
DC 20044. Submissions may be hand-delivered Monday through Friday 
between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-149856-03), 
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, 
NW., Washington, DC. Alternatively, taxpayers may submit comments 
electronically via the IRS internet site via the Federal eRulemaking 
Portal at http://www.regulations.gov (indicate IRS and REG-149856-03).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Victoria Driscoll (202) 622-4920; concerning the submission of comments 
and/or a request for a hearing, Regina Johnson (202) 622-3175 (not 
toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The IRS and the Department of the Treasury, as part of their 
continuing efforts to reduce paperwork and respondent burden, invite 
the general public to comment on proposed and/or continuing collections 
of information in accordance with the Paperwork Reduction Act of 1995 
(PRA) (44 U.S.C. 3506(c)(2)(A)). This helps to ensure that requested 
data are provided in the desired format, reporting burden (time and 
financial resources) is minimized, collection instruments are clearly 
understood, and the impact of collection requirements on respondents is 
properly assessed. The IRS and the Department solicit comments on the 
information collection request (ICR) included in this proposed 
regulatory action. A copy of the ICR may be obtained by contacting the 
OMB Unit, SE:W:CAR:MP:T:T:SP, Internal Revenue Service, Room 6406, 1111 
Constitution Ave., NW., Washington, DC 20224.
    The collection of information in this proposed rule is being 
reviewed by the Office of Management and Budget (OMB) in accordance 
with the Paperwork Reduction Act of 1995 in connection with OMB Control 
Number 1545-0074. This control number is assigned to all information 
collections associated with individual tax returns (series 1040 and 
associated forms and schedules, and related regulatory information 
collections). Information collections associated with control number 
1545-0074 are subject to annual public comment and approval by OMB in 
accordance with the Paperwork Reduction Act.
    The collection of information in these proposed regulations is in 
Sec.  1.152-4(d). The information will help the IRS determine if a 
taxpayer may claim a child as a dependent when the parents of the child 
are divorced or separated or lived apart at all times during the last 
six months of a calendar year. The collection of information is 
required to obtain a benefit. The information will be reported on IRS 
Form 8332. The time needed to complete and file this form will vary 
depending on individual circumstances. The estimated burden for 
individual taxpayers filing this form is included in the estimates 
shown in the instructions for their individual income tax return.
    The public is invited to provide comments on this information 
collection, particularly comments that:
    Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the IRS, 
including whether the information will have practical utility;
    Evaluate the burden of the proposed collection of information, 
including how the burden on those who are to respond may be minimized, 
including through the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology, such as permitting electronic submission of 
responses; and
    Enhance the quality, utility, and clarity of the information to be 
collected.
    Comments should be sent to the Office of Information and Regulatory 
Affairs, OMB, Room 10235, New Executive Office Building, Washington, DC 
20503; Attention: Desk Officer for the Department of the Treasury. 
Comments may be submitted through July 2, 2007.

Background

    This document contains proposed amendments to 26 CFR part 1 
relating to section 152(e) and the entitlement of divorced or separated 
parents or parents who live apart at all times during the last 6 months 
of the calendar year to claim a child as a dependent.
    Under section 151, a taxpayer may deduct an exemption amount for a 
dependent. Section 152, as amended by section 201 of WFTRA (Public Law 
No. 108-311, 118 Stat. 1166), defines dependent in general as a 
qualifying child or a qualifying relative.
    Section 152(c), which defines qualifying child, states that the 
qualifying child must have the same principal place of abode as the 
taxpayer for more than one-half of the taxable year. Section 
152(c)(1)(B). Section 152(c)(4)(B) provides that, if both parents of a 
child claim the child as a qualifying child and do not file a joint 
return together, the child is treated as the qualifying child of the 
parent with whom the child resides for the longer period of time during 
the taxable year. If the child resides with both parents for an equal 
amount of time during the

[[Page 24193]]

taxable year, the child is treated as the qualifying child of the 
parent with the higher adjusted gross income. As part of the definition 
of a qualifying relative, section 152(d)(1)(C) requires that the 
taxpayer provide over one-half of the individual's support for the 
calendar year. The principal place of abode requirement of section 
152(c)(1)(B), the tie-breaking rule of section 152(c)(4)(B), and the 
support rule of section 152(d)(1)(C), do not apply if section 152(e) 
applies.
    Section 152(e), which was amended by section 404 of GOZA (Public 
Law No. 109-135, 119 Stat. 2577), provides rules for parents who (1) 
are divorced or legally separated under a decree of divorce or separate 
maintenance, (2) are separated under a written separation agreement, or 
(3) live apart at all times during the last 6 months of the calendar 
year. Under section 152(e)(1), a child of parents described in section 
152(e) is treated as the qualifying child or qualifying relative of the 
noncustodial parent if the child receives over one-half of the child's 
support during the calendar year from the child's parents, the child is 
in the custody of one or both of the child's parents for more than one-
half of the calendar year, and the requirements of section 152(e)(2) or 
section 152(e)(3) are met.
    The requirements of section 152(e)(2) are met if the custodial 
parent signs a written declaration that the custodial parent will not 
claim a child as a dependent for a taxable year and the noncustodial 
parent attaches the declaration to the noncustodial parent's tax 
return. The requirements of section 152(e)(3) are met if a qualified 
pre-1985 instrument allocates the dependency exemption to the 
noncustodial parent and the noncustodial parent provides at least $600 
for the support of the child during the calendar year.
    Section 152(e)(4) defines custodial parent as the parent having 
custody for the greater portion of the calendar year and noncustodial 
parent as the parent who is not the custodial parent.
    If a child is treated as the qualifying child or qualifying 
relative of the noncustodial parent under section 152(e), then that 
parent may claim the child for purposes of the dependency deduction 
under section 151 and the child tax credit under section 24, if the 
other requirements of those provisions are met. Whether a child is a 
qualifying child for purposes of head of household filing status, the 
child and dependent care credit, or the earned income credit, is 
determined without regard to section 152(e). See sections 2(b)(1)(A)(i) 
(head of household), 21(e)(5) (dependent care credit), and 32(c)(3) 
(earned income credit).
    The special rule of section 152(e)(1) for parents living apart 
during the last six months of the calendar year was added by section 
423(a) of the Deficit Reduction Act of 1984 (Public Law No. 98-369, 98 
Stat. 494) (the 1984 Act). The 1984 Act also amended the exceptions in 
section 152(e)(2). Regulations under section 152(e)(1) and (2) (Sec.  
1.152-4 of the Income Tax Regulations) were published on March 20, 
1971, and amended on October 15, 1971, and August 20, 1979. Temporary 
regulations reflecting the amendments made by the 1984 Act (Sec.  
1.152-4T) were published on August 31, 1984.

Explanation of Provisions

    These proposed regulations update Sec.  1.152-4 by deleting 
obsolete provisions, revising language to improve clarity, and 
incorporating the provisions of Sec.  1.152-4T. The proposed 
regulations also provide guidance on issues that have arisen in the 
administration of section 152(e).

1. Definition of Custodial Parent

    Under the proposed regulations, the custodial parent is the parent 
with whom the child resides for the greater number of nights during the 
calendar year. The noncustodial parent is the parent who is not the 
custodial parent. The proposed regulations further provide that, if a 
child is temporarily absent from a parent's home for a night, the child 
is treated as residing with the parent with whom the child would have 
resided for the night. However, if the child resides with neither 
parent for a night, for example because another party is entitled to 
custody of the child for that night, the child is treated as not 
residing with either parent for that night. Comments are requested 
specifically on alternative methods of allocating nights when a child 
resides with neither parent and whether nights residing with neither 
parent should not be allocated to either parent. The proposed 
regulations provide a tie-breaking rule that, if a child resides with 
each parent for an equal number of nights during the calendar year, the 
parent with the higher adjusted gross income for the calendar year is 
treated as the custodial parent. Cf. section 152(c)(4)(B).
    Sections 151 and 152, not state law, determine whether a divorced 
or separated parent may claim an exemption for a child for Federal 
income tax purposes. A state court order or decree does not operate to 
allocate the federal exemption between parents.

2. Requirements for Release of the Right To Claim a Child

    Section 152(e)(2) provides that a custodial parent may release a 
claim to an exemption for a child by signing a written declaration (in 
such form and manner as the Secretary may prescribe by regulations) 
that he or she will not claim the child as a dependent. The 
noncustodial parent must attach the written declaration to the tax 
return to claim a dependency exemption for the child. Section 1.152-4T, 
Q&A-3, states that the written declaration may be made on a form 
developed by the IRS. Form 8332, Release of Claim to Exemption for 
Child of Divorced or Separated Parents, currently is used for this 
purpose. The temporary regulations further provide that any declaration 
not made on that form must conform to the substance of the form. 
Section 1.152-4T, Q&A-4, states that a claim to an exemption may be 
released for a single year, for a number of years, or for all future 
years, as specified in the declaration.
    The proposed regulations incorporate these rules and further 
provide 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. The written 
declaration must specify the year or years for which the release is 
effective. A written declaration that does not specify a year or years 
has no effect. A written declaration that specifies all future years is 
treated as specifying the first taxable year after the taxable year the 
release is executed and all subsequent taxable years. A court order or 
decree may not serve as the written declaration required by section 
152(e)(2).

3. Revocation of Release of Claim

    The proposed regulations provide that a custodial parent who 
released the right to claim a child may revoke the release for future 
taxable years by providing written notice of the revocation to the 
other parent. The revocation may be made on a form designated by the 
IRS, such as Form 8332, which may be revised for this purpose, or by a 
written declaration that conforms to the substance of that form, 
whether or not the release was made on the form, and must specify the 
year or years for which the revocation is effective. A revocation that 
does not

[[Page 24194]]

specify a year or years has no effect. A revocation that specifies all 
future years is treated as specifying the first taxable year after the 
taxable year the revocation is executed and all subsequent taxable 
years. The revocation may be effective no earlier than the taxable year 
that begins in the first calendar year after the calendar year in which 
the parent revoking the release provides notice of the revocation to 
the other parent. The parent revoking the release must attach the 
original or a copy of the revocation to the parent's tax return for any 
taxable year the parent claims the exemption as a result of the 
revocation, and keep a copy of the revocation and evidence of delivery 
of written notice of revocation to the noncustodial parent.

4. Never Married Parents

    In King v. Commissioner, 121 T.C. 24 (2003), the United States Tax 
Court decided that section 152(e) applies to parents who had never 
married each other. The parents lived apart for the years at issue, and 
each had claimed a dependency deduction for the same child. In 
concluding that the Form 8332 executed by the custodial parent released 
her claim to the deduction, the court determined that section 
152(e)(1)(A)(iii), which refers to parents who ``live apart at all 
times during the last 6 months of the calendar year,'' encompasses both 
married parents and parents who never married each other. The proposed 
regulations follow the decision in King v. Commissioner.

5. Effective Date

    The regulations are proposed to apply to taxable years beginning 
after the date the regulations are published as final regulations in 
the Federal Register.

Special Analyses

    This notice of proposed rulemaking is not a significant regulatory 
action as defined in Executive Order 12866. Therefore, a regulatory 
assessment is not required. It has also been determined that section 
553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does 
not apply to these regulations and, because the regulations do not 
impose a collection of information on small entities, the Regulatory 
Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to 
section 7805(f) of the Code, this notice of proposed rulemaking will be 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on its impact on small business.

Comments and Requests for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written (a signed original and eight 
(8) copies) or electronic comments that are submitted timely to the 
IRS. The IRS and Treasury Department request comments on the clarity of 
the proposed regulations and how they can be made easier to understand. 
All comments will be available for public inspection and copying. A 
public hearing may be scheduled if requested in writing by any person 
who timely submits written comments. If a public hearing is scheduled, 
notice of the date, time, and place for the public hearing will be 
published in the Federal Register.

Drafting Information

    The principal author of these regulations is Victoria J. Driscoll 
of the Office of Associate Chief Counsel (Income Tax and Accounting). 
However, other personnel from the IRS and Treasury Department 
participated in their development.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Proposed Amendment to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 is amended by adding 
an entry to read in part as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 1.152-4 also issued under 26 U.S.C. 152(e).

    Par. 2. Section 1.152-4 is revised to read as follows:


Sec.  1.152-4  Special rule for a child of divorced or separated 
parents or parents who live apart.

    (a) In general. A taxpayer may claim a dependency deduction for a 
child (as defined in section 152(f)(1)) only if the child is the 
qualifying child of the taxpayer under section 152(c) or the qualifying 
relative of the taxpayer under section 152(d). Section 152(c)(4)(B) 
provides that a child who is claimed as a qualifying child by parents 
who do not file a joint return together is the qualifying child of the 
parent with whom the child resided for a longer period of time during 
the taxable year or, if the child resided with both parents for an 
equal period of time, of the parent with the higher adjusted gross 
income. However, a child is treated as the qualifying child or 
qualifying relative of the noncustodial parent if the custodial parent 
releases the claim to the exemption under section 152(e) and this 
section.
    (b) Release of claim by custodial parent--(1) In general. Under 
section 152(e)(1), notwithstanding section 152(c)(1)(B), (c)(4)(B), and 
(d)(1)(C), a child is treated as the qualifying child or qualifying 
relative of the noncustodial parent (as defined in paragraph (c) of 
this section) if the requirements of paragraphs (b)(2) and (b)(3) of 
this section are met.
    (2) Support, custody, and parental status. The requirements of this 
paragraph (b)(2) are met if the parents of the child provide over one-
half of the child's support for the calendar year, the child is in the 
custody of one or both parents for more than one-half of the calendar 
year, and the parents--
    (i) Are divorced or legally separated under a decree of divorce or 
separate maintenance;
    (ii) Are separated under a written separation agreement; or
    (iii) Live apart at all times during the last 6 months of the 
calendar year whether or not they are or were married.
    (3) Release of claim to child. The requirements of this paragraph 
(b)(3) are met if--
    (i) The custodial parent signs a written declaration that the 
custodial parent will not claim the child as a dependent for the 
taxable year beginning in that calendar year and the noncustodial 
parent attaches the declaration to the noncustodial parent's return for 
the taxable year; or
    (ii) A qualified pre-1985 instrument, as defined in section 
152(e)(3)(B), effective for the taxable year beginning in that calendar 
year, provides that the noncustodial parent is entitled to the 
dependency exemption for the child and the noncustodial parent provides 
at least $600 for the support of the child during the calendar year.
    (c) Custodial parent--(1) In general. The custodial parent is the 
parent with whom the child resides for a greater number of nights 
during the calendar year, and the noncustodial parent is the parent who 
is not the custodial parent.
    (2) Absences. For purposes of this paragraph (c), when a child 
resides with neither parent for a night, the child is treated as 
residing with the parent with whom the child would have resided for the 
night but for the absence. However, if the child would have resided 
with neither parent for a night during an absence (for example, because 
a court awarded custody of the child to a third party for the period of 
absence), the

[[Page 24195]]

child is treated as residing with neither parent for the night of the 
absence.
    (3) Special rule for equal number of nights. If a child is in the 
custody of one or both parents for more than one-half of the calendar 
year and the child resides with each parent for an equal number of 
nights during the calendar year, the parent with the higher adjusted 
gross income for the calendar year is treated as the custodial parent.
    (d) Written declaration--(1) Form of declaration--(i) In general. 
The written declaration under paragraph (b)(3)(i) of this section must 
constitute the custodial parent's unconditional release of the parent's 
claim to the child as a dependent for the year or years for which the 
declaration is effective. A declaration is unconditional if it does not 
expressly condition the custodial parent's release 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. A written declaration 
must name the noncustodial parent to whom the exemption is released. A 
written declaration must specify the year or years for which it is 
effective. A written declaration that does not specify a year or years 
has no effect. A written declaration that specifies all future years is 
treated as specifying the first taxable year after the taxable year of 
execution and all subsequent taxable years. A court order or decree may 
not serve as the written declaration.
    (ii) Form designated by IRS. A written declaration may be made on a 
form designated by the IRS (currently Form 8332, Release of Claim to 
Exemption for Child of Divorced or Separated Parents). A written 
declaration not on the form designated by the IRS must conform to the 
substance of that form.
    (2) Attachment to return. A noncustodial parent must attach the 
original written declaration to the parent's return for the taxable 
year in which the child is claimed as a dependent. If a release of a 
claim to a child is for more than one year, the noncustodial parent 
must attach the original written declaration to the parent's return for 
the first taxable year for which the release is effective. The 
noncustodial parent must attach a copy of the written declaration to 
the parent's return for each subsequent taxable year for which the 
noncustodial parent claims the child as a dependent.
    (3) Revocation of written declaration--(i) In general. A written 
declaration described in paragraph (d)(1) of this section may be 
revoked by providing written notice of the revocation to the other 
parent. The revocation may be effective no earlier than the taxable 
year that begins in the first calendar year after the calendar year in 
which the parent revoking the written declaration provides the written 
notice.
    (ii) Form of revocation. The revocation may be made on a form 
designated by the IRS whether or not the written declaration was made 
on a form designated by the IRS. A revocation not on that form must 
conform to the substance of the form. The revocation must specify the 
year or years for which the revocation is effective. A revocation that 
does not specify a year or years has no effect. A revocation that 
specifies all future years is treated as specifying the first taxable 
year after the taxable year the revocation is executed and all 
subsequent taxable years.
    (iii) Attachment to return. The custodial parent must attach the 
original revocation to the parent's return for the taxable year for 
which the custodial parent claims a child as a dependent. If a 
revocation is for more than one year, the custodial parent must attach 
the original revocation to the parent's return for the first taxable 
year for which the revocation is effective and a copy of the revocation 
to the parent's return for each subsequent taxable year for which the 
custodial parent claims the child as a dependent. The custodial parent 
must keep a copy of the revocation and evidence of delivery of written 
notice of the revocation to the noncustodial parent.
    (e) Coordination with other sections. A child who is treated as the 
qualifying child or qualifying relative of the noncustodial parent 
under section 152(e) and this section is treated as a dependent of both 
parents for purposes of sections 105(b), 132(h)(2)(B), and 213(d)(5).
    (f) Examples. The provisions of this section are illustrated by the 
following examples which assume that each taxpayer's taxable year is 
the calendar year, one or both of the child's parents provide over one-
half of the child's support for the calendar year, the child is in the 
custody of one or both parents for more than one-half of the calendar 
year, and the child otherwise meets the requirements of a qualifying 
child under section 152(c). In addition, in each of the examples, there 
is no qualified pre-1985 instrument in effect. The examples are as 
follows:

    Example 1. (i) B and C, the parents of Child, are divorced. In 
2007, Child resides with B for 7 months and with C for 5 months. B 
signs a Form 8332 for 2007 allowing C to claim Child as a dependent 
for that year.
    (ii) Under paragraph (c) of this section, B is the custodial 
parent of Child in 2007 because B is the parent with whom Child 
resides for the greater number of nights in 2007. Because B signs a 
Form 8332, under paragraph (b) of this section, Child is treated as 
the qualifying child of C if C attaches the Form 8332 to C's 2007 
return.
    Example 2. (i) D and E, the parents of Child, are divorced. In 
2007, Child resides with D for 7 months and with E for 5 months. D, 
the custodial parent, does not execute a Form 8332 or similar 
declaration for 2007.
    (ii) Because D does not execute a Form 8332 or similar 
declaration for 2007, section 152(e) and this section do not apply 
to determine whether Child is treated as the qualifying child of D 
or E. Instead, whether Child is the qualifying child of D or E is 
determined under section 152(c).
    Example 3. F and G, who never married, are the parents of Child. 
In 2007, Child spends alternate weeks residing with F and G. During 
a week when Child is residing with F, F gives Child permission to 
spend a night at the home of a friend. Under paragraph (c)(2) of 
this section, the night Child spends at the friend's home is treated 
as a night in which Child resides with F for purposes of determining 
whether Child is residing with F or G for the greater number of 
nights in the calendar year.
    Example 4. J and K are the divorced parents of Child. In 2007, 
Child spends alternate periods residing with J or K. In August of 
2007, J and Child spend 10 nights together in a hotel while on 
vacation. Under paragraph (c) of this section, the 10 nights when J 
and Child are on vacation are treated as nights in which Child 
resides with J for purposes of determining whether Child is residing 
with J or K for the greater number of nights in the calendar year.
    Example 5. (i) In 2006, L and M, the parents of Child, execute a 
written separation agreement. The agreement provides that Child will 
live with L and that M will make monthly child support payments to 
L. The agreement further provides that L will not claim Child as a 
dependent in 2007 and in subsequent alternate years. The agreement 
does not expressly condition L's agreement not to claim Child as a 
dependent on M's payment of child support or any other condition. 
The agreement contains all the other information requested on Form 
8332. M attaches the agreement to M's tax returns for 2007 and 2009.
    (ii) In 2008, M fails to provide child support for Child, and L 
signs a Form 8332 revoking the release of L's right to claim Child 
as a dependent for 2009 and delivers a copy of the Form 8332 to M. L 
attaches the Form 8332 revoking the release to L's tax return for 
2009 and keeps a copy of the revocation and evidence of delivery of 
written notice to M.
    (iii) M may claim Child as a qualifying child for 2007 because L 
releases the right to claim Child as a dependent under paragraph 
(b)(3) of this section by executing the separation agreement, and M 
attaches the separation agreement to M's tax return in accordance 
with paragraphs (d)(1) and (d)(2) of this section. The separation 
agreement qualifies as a written declaration under paragraph (d)(1) 
of this section because L's agreement not to claim Child as a 
dependent

[[Page 24196]]

is not conditioned on M's payment of support or meeting of any other 
obligation, and the agreement otherwise conforms to the substance of 
Form 8332. For 2009, only L may claim Child as a qualifying child 
because in 2008 L revokes the release of the claim in accordance 
with paragraph (d)(3) of this section, and the revocation takes 
effect in 2009, the taxable year that begins in the first calendar 
year after L provides written notice of the revocation to M.
    Example 6. The facts are the same as Example 5, except that the 
agreement expressly states that L agrees not to claim Child as a 
dependent only if M is current in the payment of support for Child 
at the end of the calendar year. The separation agreement does not 
qualify as a written declaration under paragraph (d)(1) of this 
section because L's agreement not to claim Child as a dependent is 
conditioned on M's payment of support. Therefore, M may not claim 
Child as a qualifying child in 2007 or 2009.
    Example 7. (i) N and P are the divorced parents of Child. Child 
resides with N for ten months and with P for two months in each year 
2007 through 2009. In 2007, N provides a written statement to P that 
provides that N will not claim Child as a dependent but does not 
specify a year or years. P attaches the statement to P's returns for 
2007 through 2009.
    (ii) Because the written statement provided by N does not 
specify the year or years for which P may claim Child as a 
qualifying child, under paragraph (d)(1) of this section, the 
written statement is not a written declaration that conforms to the 
substance of Form 8332. Therefore, P may not claim Child as a 
qualifying child in 2007 through 2009.
    Example 8. (i) R and S are the divorced parents of Child. Child 
resides solely with R. The divorce decree requires S to pay child 
support to R and requires R to execute a Form 8332 to release the 
right to claim Child as a qualifying child to S. R fails to sign a 
Form 8332 for 2007, and S attaches an unsigned Form 8332 to S's 
return for 2007.
    (ii) Child is the qualifying child of R for 2007. The order in 
the divorce decree requiring R to execute a Form 8332 is ineffective 
to allocate the right to claim Child as a qualifying child to S. 
Furthermore, under paragraph (d)(1) of this section, the unsigned 
Form 8332 does not conform to the substance of Form 8332. Therefore, 
S may not claim Child as a qualifying child in 2007.
    (iii) If, however, R executes a Form 8332 for 2007 and S 
attaches the Form 8332 to S's return, then S may claim Child as a 
qualifying child for 2007 under paragraph (d)(1) of this section.

    (g) Effective date. This section applies to taxable years beginning 
after the date these regulations are published as final regulations in 
the Federal Register.

Kevin M. Brown,
 Deputy Commissioner for Services and Enforcement.
 [FR Doc. E7-8378 Filed 5-1-07; 8:45 am]
BILLING CODE 4830-01-P