IRS Fraud

[gotquestions08]

What is the name of your state (only U.S. law)? Florida

researching my wife I have found that she lied on her 07 tax return. Stating she was Head of Household and claiming the 2 kids. (one of which is my step-son). Also claimed EIC and Child Tax Credit none of which she would qualify for with my income. We did file seperate of course otherwise she couldn't have done that. I have just reported it to the IRS but can that come back on me since we are married but our monies are seperate?

 

[LdiJ]

What is the name of your state (only U.S. law)? Florida

researching my wife I have found that she lied on her 07 tax return. Stating she was Head of Household and claiming the 2 kids. (one of which is my step-son). Also claimed EIC and Child Tax Credit none of which she would qualify for with my income. We did file seperate of course otherwise she couldn't have done that. I have just reported it to the IRS but can that come back on me since we are married but our monies are seperate?

Are you separated? If so, when did you separate? She would qualify for the Child Tax Credit no matter what, its EIC and Head of Household that could be in question.

If you and your wife have not separated, then reporting her can certainly do damage to your family finances.

 

[gotquestions08]

Status

No we haven't seperated. We are still living in the same house. I am trying to get an attorney for a divorce. We have always kept our financial seperate. I just stubbled on to them while gathering paperwork for divorce. I am just afraid that this will come back on me. She put down our old address instead of our current address on her return. She did that deliberately. Because of that I had to file late after I applied for extenion in April. Now I owe money because I wasn't able to claim my daughter. She filed her taxes right at the first of the year. I questioned her and she never would answer me. Now I see why.

 

[mistoffolees]

No we haven't seperated. We are still living in the same house. I am trying to get an attorney for a divorce. We have always kept our financial seperate. I just stubbled on to them while gathering paperwork for divorce. I am just afraid that this will come back on me. She put down our old address instead of our current address on her return. She did that deliberately. Because of that I had to file late after I applied for extenion in April. Now I owe money because I wasn't able to claim my daughter. She filed her taxes right at the first of the year. I questioned her and she never would answer me. Now I see why.

If you want to make an issue of it, then you file the correct way. In your case, it sounds like you should file as married, filing separately. The IRS will flag the returns and will send you both a notice telling you to correct your filing status if it's in error. If she doesn't correct it at that point, they will ask each of you to prove your status.

It will take a while, but eventually it gets straightened out.

As for your daughter, I don't know the answer, but check IRS rules. If you were divorced, they have a series of tiebreakers which determines who gets the deduction. First is the number of nights she spent at each house (the person with >50% gets the deduction). If it's exactly equal, then the one with the higher AGI gets it, and then there are a couple more tiebreakers. I don't know what happens when you're married and each trying to take the deduction.

 

[LdiJ]

If you want to make an issue of it, then you file the correct way. In your case, it sounds like you should file as married, filing separately. The IRS will flag the returns and will send you both a notice telling you to correct your filing status if it's in error. If she doesn't correct it at that point, they will ask each of you to prove your status.

It will take a while, but eventually it gets straightened out.

As for your daughter, I don't know the answer, but check IRS rules. If you were divorced, they have a series of tiebreakers which determines who gets the deduction. First is the number of nights she spent at each house (the person with >50% gets the deduction). If it's exactly equal, then the one with the higher AGI gets it, and then there are a couple more tiebreakers. I don't know what happens when you're married and each trying to take the deduction.

The tiebreaker rules still apply, and in the end, the person with the higher AGI ends up being the one to claim the kids.

I would recommend however, that the OP consult with a local attorney prior to taking any steps to report her to the IRS.

 

[mistoffolees]

I would recommend however, that the OP consult with a local attorney prior to taking any steps to report her to the IRS.

Actually, he won't need to. If he files married, separate and she files head of household and they both claim the same child, the IRS will figure it out whether he reports her or not.

 

[LdiJ]

Actually, he won't need to. If he files married, separate and she files head of household and they both claim the same child, the IRS will figure it out whether he reports her or not.

This is true, however, we don't know that he has the higher AGI, (for example, if he is self employed his AGI may be quite low, and odds are that a normal W2 employee would not have needed an extension) and we don't know how any debt that one of them might incur, with the IRS, might play out in any future property settlement.

She definitely should not have claimed Head of Household and EIC. However she may still have had the right to the dependency exemption under the tiebreaker rules. We do not have the necessary information to make a call on that. We also don't know if filing HOH actually made a difference on her return. (other than for EIC purposes)

You are assuming that because he is a man, he has the higher AGI...tsk tsk.

 

[mistoffolees]

This is true, however, we don't know that he has the higher AGI, (for example, if he is self employed his AGI may be quite low, and odds are that a normal W2 employee would not have needed an extension) and we don't know how any debt that one of them might incur, with the IRS, might play out in any future property settlement.

She definitely should not have claimed Head of Household and EIC. However she may still have had the right to the dependency exemption under the tiebreaker rules. We do not have the necessary information to make a call on that. We also don't know if filing HOH actually made a difference on her return. (other than for EIC purposes)

You are assuming that because he is a man, he has the higher AGI...tsk tsk.

I didn't assume any such thing. I said that if he files correctly (married, separate) that the IRS will figure out that she wasn't allowed to file head of household and EIC.

 

[LdiJ]

I didn't assume any such thing. I said that if he files correctly (married, separate) that the IRS will figure out that she wasn't allowed to file head of household and EIC.

Sorry, but that won't trigger it. The IRS doesn't know whether or not they are separated. Its quite common for a separated couple to have one party filing head of household, and the other filing married filing separately. That doesn't trigger anything.

Only a duplicate claim for the child would trigger something, and we don't know whether or not he should be claiming the child under the tiebreaker rules, because we don't know who has the higher AGI.

 

[gotquestions08]

Agi

I make twice as much as my wife. So my AGI is higher than hers. She pay nothing of the household bills. She telling me she doesn't recieve child support on my for one of her children. But I have also found out that is a lie. Then I found she has arrest warrant for Unemployement fraud still out standing from 2005 in an old county that we lived in prior to marriage.

I did not claim my child because I knew she already did. When we bought our home I seen her check stub and realize that she had an incorrect tax status. Of Single with 7 exemptions. I called her out on this and got no response.

All the proof I have obtained shows she did it on purpose and knew what she was doing. That is apparent as she has a record of fraudlient activites.

 

[LdiJ]

I make twice as much as my wife. So my AGI is higher than hers. She pay nothing of the household bills. She telling me she doesn't recieve child support on my for one of her children. But I have also found out that is a lie. Then I found she has arrest warrant for Unemployement fraud still out standing from 2005 in an old county that we lived in prior to marriage.

I did not claim my child because I knew she already did. When we bought our home I seen her check stub and realize that she had an incorrect tax status. Of Single with 7 exemptions. I called her out on this and got no response.

All the proof I have obtained shows she did it on purpose and knew what she was doing. That is apparent as she has a record of fraudlient activites.

Well yes, then you should have been the one entitled to the tax exemption. You could amend your return to add the child, and then let the IRS sort it out. However, I would touch base with a local attorney first. This will create a large tax debt for her, and that may end up being a marital debt, so you want to consult with an attorney first.