thanks to Danielle, she is filing taxes poor girl..
we bumped into this wonderful concept.
you really want to save money on your taxes?
claim your child as kidnapped.. or as a dependent..

Residency Test
To meet this test, your child must have lived with you for more than half of the year. There are exceptions for temporary absences, children who were born or died during the year, kidnapped children, and children of divorced or separated parents.
Temporary absences. Your child is considered to have lived with you during periods of time when one of you, or both, are temporarily absent due to special circumstances such as:
*
Illness,Education,Business,Vacation, or Military service.

Death or birth of child. A child who was born or died during the year is treated as having lived with you all year if your home was the child's home the entire time he or she was alive during the year. The same is true if the child lived with you all year except for any required hospital stay following birth.

Child born alive. You may be able to claim an exemption for a child who was born alive during the year, even if the child lived only for a moment. State or local law must treat the child as having been born alive. There must be proof of a live birth shown by an official document, such as a birth certificate. The child must be your qualifying child or qualifying relative, and all the other tests to claim an exemption for a dependent must be met.

Stillborn child. You cannot claim an exemption for a stillborn child.

Kidnapped child. You can treat your child as meeting the residency test even if the child has been kidnapped, but both of the following statements must be true.
1.
The child is presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or the child's family.
2.
In the year the kidnapping occurred, the child lived with you for more than half of the part of the year before the date of the kidnapping.

This treatment applies for all years until the child is returned. However, the last year this treatment can apply is the earlier of:
1.
The year there is a determination that the child is dead, or
2.
The year the child would have reached age 18.

Children of divorced or separated parents. In most cases, because of the residency test, a child of divorced or separated parents is the qualifying child of the custodial parent. However, the child will be treated as the qualifying child of the noncustodial parent if all four of the following statements are true.
1.
The parents:
"omissis"

Custodial parent and noncustodial parent. The custodial parent is the parent with whom the child lived for the greater part of the year. The other parent is the noncustodial parent.

If the parents divorced or separated during the year and the child lived with both parents before the separation, the custodial parent is the one with whom the child lived for the greater part of the rest of the year.

Example.
Your child lived with you for 10 months of the year. The child lived with your former spouse for the other 2 months. You are considered the custodial parent.
Written declaration. The custodial parent may use either Form 8332 or a similar statement (containing the same information required by the form) to make the written declaration to release the exemption to the noncustodial parent. The noncustodial parent must attach the form or statement to his or her tax return.

"omissis"
1.
The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support.
2.
The custodial parent will not claim the child as a dependent for the year.
3.
The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent.

for more fun:

http://www.irs.gov/publications/p501/ar02.html#d0e2633