- 8 -
Internal Revenue Service then found itself “in the position of an
unwilling arbiter between the contending parents.” S. Rept. 90-
488, 90th Cong., 1st Sess. 1528 (1967).
In order to keep the Internal Revenue Service out of these
disputes, section 152(e), as amended in 1966, provided as a
general rule that the parent who had custody of a child for the
greater portion of the year is entitled to the deduction. Act of
Aug. 31, 1967, Pub. L. 90-78, 81 Stat. 191. Congress recognized
that divorcing parents often take dependency exemptions into
account when dividing the financial assets of a marriage, and an
exception to this general rule included instances where the
parent who had custody for the lesser period was granted the
deduction as part of a divorce decree or separate maintenance
agreement.
Accounting for custody proved as difficult as tracking
support and still presented the same problem of substantiation
and proof. H. Rept. 98-432 (Part 2), at 1498 (1984). Congress
again amended section 152(e) to “[allow] the custodial spouse the
exemption unless that spouse waives his or her right to claim the
exemption” still with the intention that dependency disputes
between parents would be resolved without the involvement of the
Internal Revenue Service. Id. at 1499.9
9 In October 2004, as part of the Working Families Tax Relief
Act of 2004, Pub. L. 108-311, sec. 201, 118 Stat. 1169, sec.
(continued...)
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