When people divorce, the court issues a document called a divorce decree. This decree sets the terms of their divorce and, if they have kids, will decide custody arrangements. The decree will also discuss tax matters, including who gets to claim their children as dependents on their tax returns. Common arrangements include alternating years or granting the dependents to the higher earning spouse until the other spouse earns more money.
§152 and its regulations provide the rules for claiming a dependent and provide rules specific to divorced parents. The default is that the custodial parenta (the parent with whom the child spends more nights with during the yearb) gets to claim the exemption unless they provide a completed Form 8332c to the noncustodial parent. Form 8332 releases the custodial parent’s claim to the dependent exemption and gives it to the noncustodial parent. The noncustodial parent attaches Form 8332 to their tax returnd.
Because of how §152 is written, the custodial parent must release their claim to the exemption for the child in order for the noncustodial parent to claim the exemption. If the custodial parent does not provide Form 8332 to their ex-spouse, the IRS will not allow the noncustodial parent to claim the exemption in spite of any divorce decree to the contrary.