Getting Audited! I filed head of household we were separated and I provided all support for my children last year, 2 of the children lived with me all year, We shared a house with my sister and everything was in her name, they are asking me for a lease or mortgage agreement, which i do not have, Can my sister write out anything saying that I lived with her and paid rent to her or does it have to be a legal document?
The requirement is that you pay more than half the cost of keeping up a home. There is no requirement that you have a written lease; therefore, a letter from your sister, giving the amount of rent you pay her should be sufficient for the purpose. However, they may want to compare what you paid with what she also paid in order to determine whether you paid more than half the cost. In that case, they may want to see the mortgage agreement in order to determine what she paid. I suggest you call the IRS (there should be a contact number on the letter they sent you.), tell them the situation, and ask what documentation they want.
But first, I suggest you read about Head of Household status in IRS Publication 17, Your Federal Income Tax, which you can download for free at the IRS site at:
http://www.irs.ustreas.gov/forms_pubs/index.html
