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In the present case, Ms. Pond, as the custodial parent, did
not sign a Form 8332 or any written declaration or statement
agreeing not to claim the exemptions for ND and BD, and no such
form, declaration, or statement was attached to petitioners’
return for the year in issue.
However, petitioner argues that the separation agreement in
the Judgment of Divorce Nisi, which ended his marriage with Ms.
Pond, by its terms grants him the right to claim ND and BD as
dependents for Federal and State income tax purposes.
We note that even if the provision of the separation
agreement regarding dependency exemptions is controlling in this
case, Ms. Pond would be entitled to one dependency exemption due
to the fact that she earned in excess of $20,000 in the taxable
year 2002.
Although the separation agreement, by and through its own
terms, provides that petitioner is entitled to a dependency
exemption for one of the claimed minor dependents, it is well
settled that State courts by their decisions cannot determine
issues of Federal tax law. See Commissioner v. Tower, 327 U.S.
280 (1946); Kenfield v. United States, 783 F.2d 966 (10th Cir.
1986); Neal v. Commissioner, T.C. Memo. 1999-97; Nieto v.
Commissioner, T.C. Memo. 1992-296.
We find that the separation agreement, in the present case,
does not “conform to the substance” of Form 8332. See sec.
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