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Divorce Myths: The court will want to hear about my spouse’s fault. March 18, 2008

Posted by csstephens in Dissolution, Myths, Property Division.
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Many clients, in the first meeting, ask me what effect will their spouse’s bad acts have on the case. We hear about many human problems, from alcohol and drug addiction to abuse to adultery. We are frequently asked will they do better in court because their spouse has committed bad acts. The answer is that except for issues relating to custody and parenting time, fault is irrelevant.

In ORS 107.036, the Oregon legislature abolished fault in annulment, divorce (dissolution) , and separation cases. The court is barred from hearing evidence of specific acts of misconduct, except to the extent necessary to prove that a couple has “irreconcilable differences.” The court is specifically barred from considering “fault” when dividing real and personal property, and in setting the duration or amount of support.

What does this mean to divorcing parties in Oregon courts? When it comes to property and support, affairs don’t matter. Being a jerk doesn’t matter. Being a bad parent doesn’t matter. Being verbally or physically abusive doesn’t matter. When it comes to dividing assets and setting support, the court only wants to hear relevant, non-fault based testimony.

There is always an exception, and it is for custody and parenting time cases. When the court is analyzing who should have custody of the minor children, and what parenting plan is appropriate for the parties, it will hear evidence of specific acts of misconduct. While this evidence is not supposed to affect property division or support, it can and will affect the court’s ruling regarding custody and parenting time. The reason is that the court’s job when dealing with kids is to do what is in “the child’s best interests.” So, being a jerk means you will likely get half of the property, but not custody of the kids.

Who gets to claim the child tax exemption? March 10, 2008

Posted by margolinlegal in Child Custody, Child Support, Dissolution, Myths, settlement.
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istock_000004891591xsmall.jpg Clients often come to me asking whether they or their ex-spouse/unmarried parent of their child can claim their joint child as a dependents for tax purposes and receive the dependent tax exemption. They often think that this is a decision that is up to them and attorneys often use it as a bargaining chip.

In a divorce or custody case I am representing clients in state court. The United States Congress, through the tax code, has determined how the child/dependent tax exemption should be awarded. The supremacy clause of the United States Constitution prevents state courts from deciding issues of federal law. This means that a state court cannot properly award the exemption to a parent who otherwise would not qualify for the exemption under federal law.

The qualifying parent under IRS rules is the “custodial parent,” which is defined as “the parent having custody for the greater portion of the calendar year.” The award of “legal custody” has no effect on this definition, rather the custodial parent is “the parent with whom the child resides for a greater number of nights during the calendar year.” In cases where the child resides an equal number of overnights with each parent, the parent with the higher adjusted gross income for the calendar year is awarded the exemption.

Parties can agree to share the exemption or to have the parent that does not qualify receive the exemption. This is usually accomplished by a provision in the parties’ judgment. In order to provide the non-qualifying parent with the exemption, the qualifying parent must sign a written declaration and the declaration must be attached to the non-custodial/non-qualifying parent’s income tax return. This can be completed using IRS tax form 8332, which can be found here http://www.irs.gov/pub/irs-pdf/f8332.pdf.

A decision to allocate the dependent exemption to the non-qualifying parent should not be taken lightly. In addition to the exemption, the non-qualifying parent will also receive the child tax credit. Therefore, an agreement to deviate from IRS rules can have significant tax impacts for the qualifying parent and creat a tax windfall for the non-qualifying parent. If the agreement will be included as a provision in a judgment, the decision to do so should be carefully discussed with your attorney.

The IRS faq located at http://www.irs.gov/faqs/faq-kw46.html provides detailed information on this question.