What happens when two people claim the same dependent on their taxes?

Answer by Wray Rives:

First if two people claim the same dependent, the one who files second, will not be able to file electronically, but will have to file a paper return.
After both file, both will receive notification from the IRS, that their dependent is claimed on another return and request clarification.  I suggest you be the first to respond to the notice.
If the dependency exemption is covered in the divorce decree, then the IRS is required to follow that and the one who should not claim the dependent will have to amend their return. Unless there is a Form 8832 filed https://www.irs.gov/pub/irs-pdf/…
If the dependency exemption is not covered, then they will first look at the rules for claiming dependency to see if one parent is disqualified, if both parents qualify, then there are a list of tiebreakers that will be followed.  Finally if that does not decide conclusively, the person with the highest AGI will get the exemption.  All of this is covered in IRS Publication 504 (2014), Divorced or Separated Individuals

What happens when two people claim the same dependent on their taxes?