- 13 -
1998 amendment, the identification requirement was included within
the definition of a qualifying child), Congress enacted the 1998
amendment, reflecting its intent that the identification of the
child not be an element of the definition of a qualifying child.
This correction, in turn, made the tie-breaker rule apply not only
in the case of two or more individuals actually claiming the credit
with respect to the same child, but also in any case where two or
more individuals could claim the credit with respect to the same
child.
As the Joint Committee on Taxation explained:
Tie-breaker rule
If more than one taxpayer would be treated as an
eligible individual with respect to the same qualifying
child for a taxable year only the individual with the
highest modified adjusted gross income (“modified AGI”) is
treated as an eligible individual with respect to that
child. * * *
Historically, the Internal Revenue Service (“IRS”)
has interpreted this tie-breaker rule to deny the EIC to
other taxpayers meeting the definition of eligible
individual regardless of whether the taxpayer with the
highest modified AGI had claimed the EIC with respect to
the child on the taxpayer’s tax return. The Tax Court in
Lestrange v. Commissioner, T.C.M. 1997-428 (1997) held
that the tie-breaker rule does not apply to deny the EIC
to a taxpayer unless another taxpayer actually claimed the
EIC with respect to the child on the taxpayer’s return.
The Tax Court decision hinged on the determination that
the child was not a qualifying child with respect to the
taxpayer with the highest modified AGI because the
identification test was not met by that taxpayer with
respect to the child. Under this view, because the
taxpayer with the highest modified AGI did not satisfy the
qualifying child requirement, there was not more than one
eligible individual and the tie-breaker rule did not
apply.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011