I know a lot do claim dependent during a mission and most are going to get away with it because the IRS isn't likely to audit someone on account of this. Sounds like you recommend claiming them to your clients (I am assuming you are a CPA based on your posting history). I think you could argue for a reasonable basis position under Sec. 6662 and the Regulations there under based on the ambiguity, but I would definitely not give it substantial authority under Treas. Reg. 1.6662-4.


Can claim a dependent as either a qualifying child or a qualifying relative.

Tests To Be a Qualifying Child
1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, or stepsister, or a descendant of any of them.
2. The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly); (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly); or (c) any age if permanently and totally disabled.
3. The child must have lived with you for more than half of the year.
4.The child must not have provided more than half of the child’s own support for the year.
5. The child must not be filing a joint return for the year (unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid).

Mission kid away for a full two years will have at least one year in which they will fail #2 because 19+. There's allowance for "temporary absence" for #3, so could try and argue not failing there, but it's all or nothing and you have to meet all tests, anyway.

Since failing the qualifying child test (as you acknowledged above), you look to the qualifying relative test.

Tests To Be a Qualifying Relative
1. The person can't be your qualifying child or the qualifying child of any other taxpayer.
2. The person either (a) must be related to you in one of the ways listed under Relatives who don't have to live with you, or (b) must live with you all year as a member of your household (and your relationship must not violate local law).
3. The person's gross income for the year must be less than $4,400.
4. You must provide more than half of the person's total support for the year.

Mission kid away the whole year will fail #4, unless you want to argue that your $400 / month or whatever it is these days is > what the church provides in housing, food, transportation, etc. That's unlikely for the vast majority of missions. Some third-world country? Maybe. Most cases? Not likely.

Again, most could claim it and get away with it. Audit risk is minimal. As a CPA, though, the position isn't strong, and as noted below with one anecdotal example by blau56, would be likely overturned upon exam. Because the basis is only reasonable (if that) it would also likely be subject to penalty and interest for understatement of tax, unless it were properly disclosed.