As you know, our firm has lobbied extensively for simplification of the Internal Revenue Code. It now appears that our efforts may come to fruition. Congress passed the Working Families Tax Relief Act of 2004 (or WFTRA to those of you with unique tongue structure).

The new law attempts to amend Section 152 of the IRC by including a uniform definition of a child (to our knowledge, no occupants of hospital delivery rooms were consulted). First, the term dependent is defined as a qualifying child with the following exception: “…If an individual is a dependent of a taxpayer for any taxable year of such taxpayer beginning in a calendar year, such individual shall be treated as having no dependents for any taxable year of such individual beginning in such taxable year…. ”

Even though further clarification would appear to be unnecessary, conforming amendments state that “…Section 2(b)(2) is amended by striking subparagraph (A) and by redesignating subparagraphs (B), (C) and (D) as subparagraphs (A), (B) and (C), respectively and by amending clauses (i) and (ii) of Section 2 (b)(3)(B) to read (i) subparagraph (H) of Section 152 (d) (2) or (ii) paragraph (3) of Section 152(d)….”

If you are now concerned whether or not your child is really a child, please feel free to call one of our professionals, particularly one who is a parent.

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About Tom O'Brien

Thomas S. O'Brien, CPA, Of Counsel and now retired, is a co-founder of the Firm and served as Managing Partner for the first ten years of its existence. He specialized in the areas of retirement, estate planning, accounting, and tax areas of client service.

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