My former spouse and I have been divorced since November of 2011. We have an agreement that he claims two children as dependents and I claim one until they are no longer eligible dependents. Being the one taking only one dependent, I agreed on the condition that I would claim the youngest child every year. However, he asked to claim her last year so he could take the child care credit since had child care tuition withheld, and to have me claim the middle child. I agreed. This year I am wondering if I should have only the oldest child as she is a junior in high school and FAFSA is coming into play. Is this inviting issues like an audit flag? I make much less money than he does.

I guess so. Your decree of divorce controls this issue ;you need permission from the court to behave differently. you negotiate your exemptions, the IRS wants to know about it. You can’t just reach a decision and file your returns accordingly unless it’s in line with IRS rules. The IRS automatically gives the exemption for each child to the custodial parent. Therefore, if your spouse is the custodial parent and he is not going to claim the exemption, your spouse must complete and sign IRS Form 8332.for more info in detail, please contact the IRS.