By mid June 2005 I satisfied IRS requirements for claiming my two children as dependents. They lived in my home more than half the year, and I provided more than half their support (NCP not paying support). In June 2005 I was handed a divorce decree stating my ex and I each are to claim one child. It was vague and did not say what tax year to begin doing this. I feel I should claim both children for 2005 due to satisfying IRS requirements and then begin claiming one child in 2006. For tax purposes, does a 2005 divorce decree automatically apply to 2005 tax year even if there are mitigating circumstances, or am I just going to loose if I try to claim both children?

Hi,
I am not a lawyer or a CPA, but if the divorce degree was issued in 2005, it seems it would apply to 2005; you get dependent, he gets one.
To be sure, please call a CPA near you, go in and talk with them. Ask the cost for talking beforehand. The cost might be worth the trip!
I do wish you the best of luck.

GoodMama1:

What FredG states is good advice. Querying a tax professional in person is a good course of action.

Normally, the IRS is not in a position of enforcing divorce decrees. When there is a dispute between divorced parents over who can claim the exemptions for the children, the IRS will almost always award the exemptions to the custodial parent unless said custodial parent gives up those exemptions in writing (Form 8332).

Beginning in 2005, however, the IRS will take a divorce decree into consideration when determining who is entitled to the children's exemption.

In my opinion, your best bet is to work with your ex-spouse to determine who would benefit best from taking the exemptions, then split the proceeds. I currently have two sets of divorced parents for whom I do tax returns for both parents. I determine who would get the biggest writeoff from claiming the children, then tell the parent who gets the exemptions how much money to send the other parent to compensate him/her for giving up their claim for the exemption. As long as both parents agree and only one parent claims the children's exemptions, the IRS will not contest who claims the chidlren, even if it changes from year to year. It is a win-win situation for all involved, and is one less point of contention between the parents.