Dependent Exemption

Gao ID: GGD-94-200R August 31, 1994

Pursuant to a congressional request, GAO reviewed section 152 of the Internal Revenue Code, focusing on circumstances in which noncustodial parents can claim the child dependent exemption. GAO noted that: (1) although inequities occur under the current law when the noncustodial parent provides more than half the support for a child and cannot claim the dependent exemption, the current law provides more certainty to taxpayers as to who can claim the exemption and is less burdensome than the pre-1985 law; (2) changing the current law would require parents to maintain detailed records and document that they provide more than half the dependent's support; and (3) Congress should consider enacting legislation that would replace the dependent support test with a residency test in cases where the dependent child lives with the taxpayer.

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