Court orders say non custodial parent claims 2 kids until their 18 and the custodial parent signed the 8332 form but went on to claim the 2 kids the following tax year but what does the court do with the IRS 8332 form
The court will give the signed 8332 to the non-custodial parent. The non-custodial parent will claim the dependents and include that 8332 with the tax return they file. Now if the custodial parent claimed the dependents for a tax year that is clearly indicated on the 8332 for the non-custodial parent and their tax return has already been accepted by the IRS, then the non-custodial parent has no choice other than to print, sign and mail the return to the IRS, including the 8332 with it (or a copy of it). When the IRS gets it, then the non-custodial parent will be allowed to claim the dependents and the custodial parent will have to pay some of their refund back, along with some hefty fines and penalties for filing a fraudulent return.
A court does not do anything with a 8332 form. The custodial parent gives the signed 8332 to the non-custodial parent that must either be attached to the non-custodial parents mailed tax return or if e-fileing mailed separately to the IRS within 3 days of e-filing with a 8453 transmittal form.
Only if part II is signed releasing it for more than one year. If part I is signed then a *new* 8332 for is required each year. (If part II is signed the it will also specify how many years is will apply or "All Future Years" if open ended.)