Can DOR Be Prohibited From Intercepting a Tax Refund to Pay Past Due Child Support?

Florida's First District Court of Appeals looked at this issue in the case of DOR v. Baker decided on December 31, 2009. In that case the Father owed over $26,000.00 in past due support. Nonetheless he had convinced the lower court to prohibit the Department of Revenue (DOR) from intercepting all but $1,000.00 of his federal income tax refund. He had also prevailed in his request to claim the dependency exemption over the Department's objection. The higher court reversed the lower court stating that the Father had not (1) properly presented his claim, (2) had not properly noticed the Department, (3) had not used up all potential administrative remedies and (4) that his request was premature. Moreover the appellate court found that in all events the Father was still not entitled to the relief given him because the trial court could not lawfully place any restrictions on the power delegated by federal law to DOR relating to interception and retention of tax refunds.

Can a "nonsutodial parent" claim the federal income tax exemption for the children?

The answer has usually been yes, if agreed upon by the parties or ordered by the Court. The answer is still yes but the requirements to be able to do so have changed. On June 19, 2009 the IRS issued Chief Counsel Advice Memorandum No. 200925041 and this changed the requirements needed for a noncustodial parent to claim a child exemption. For tax years after July 2, 2008, attaching a copy of the Final Judgment that transfers the exemption to the noncustodial parent as long as certain conditions are met (such as the parent having been current in child support) is not sufficient and the exemption will be disallowed. IRS form 8332 is now required or, alternatively, "a document that conforms to the substance of Form 8332 and that has as its only purpose the release of a claim to the exemption." For those whose Judgments occurred prior to July 2, 2008, the Judgment itself is good enough only if it allows the noncustodial parent to claim the exemption unconditionally. The best practice should now be that an agreement contain certain language requiring IRS form 8332 be executed for a given year when the conditions for it have been met, together with enforcement language like sanctions and/or fees.