I'm in the process of adopting a little girl from foster care. She was placed in my home on June 26, 2007 and has been my responsibility since.
 
Her foster mother called me the other day to tell me she intends to claim my daughter on her taxes. This really burns me since this woman never spent of a dime of her money on her. Meanwhile, I'm the one that has been paying for pre-school, day care, ballet, camp, karate, tennis, bible school etc.
 
I read the tax code for this provision and it says the child had to be residing with you for more than half the year. It seems clear to me then that she does not have the right to take the tax deduction since she didn't even have Zoe for a full six months.
 
I explained that to her but she says her accountant told her she could.
 
Who's right?

what you found is correct.  what can override it is an agreement to allow her to claim her, which i assume you didn't sign/agree to.  I wonder if she understand what her accountant is saying. Foster care provider can have some benefits if they aren't in the business of being foster parents.  they can, for example, get a deduction (charitable deduction) for unreimbursed expenses while the child was in their care.

I would also wonder about the timing of the paperwork.  it is so close to 6 month point that one side thinks they have more than 1/2 year and so does the other.  With your background, i tend to think you got the date right.

my money is that both will attempt to claim the child and you will both get letters about it.  Burden of proof and any legal documents will win the day.  Sadly its will be a mini-battle (but i don't think that bad of one) to resolve it.

if you are expecting a refund - don't count on it being to processed quickly.  a dispute will put it on hold.

edited
btw, if you haven't looked into it, there is a form/credit for adoption
http://www.irs.gov/pub/irs-pdf/f8839.pdf <form
http://www.irs.gov/pub/irs-pdf/i8839.pdf  <instructions

But if Fabi gets her returns in first (electronically) the Foster Mothers return will not be accepted (electronically), and she will have to file paper...  and Fabi will most likely have her refund before any letter is issued

I think she's probably already filed. Thanks.  I just want to be clear though, since I have documentation showing that she was placed in my home on June 26, she should lose right? 
 
There is no grey area, is there?