tax/dependent/divorce question

[kristi729]

What is the name of your state (only U.S. law)? ex hubby in NY, me in FL

My ex-husband has claimed our daughter as a dependent on his taxes...when he was not suppose to. We alternate every year per our divorce decree (finalized 2001) and he filed using her as a dependent - stated on his taxes that she lived with him for 7 months (not true). This was to be my year to claim her. I know that he is having major financial problems at the moment so I know why he did it.

I know that I can file a complaint with the IRS HOWEVER I plan on filing a violation of our divorce decree as well. Does anyone know where I file this violation? Supreme Court because it's a federal issue or would it need to be filed in support court? or does it get filed in custudy/visitation court? He lives in NY and we always file everything there even though I live in FL. I do not have any of my orders filed in this state (not yet at least) and in NY support and visitation/custody courts are separate.

ALSO, according to our divorce decree any return he gets he has to split with me 50/50. Maybe that can help determine where to file?

Can I just mention also.. I love this site... I hate having to keep going to court for silly things like this. Can someone help?

 

[LdiJ]

What is the name of your state (only U.S. law)? ex hubby in NY, me in FL

My ex-husband has claimed our daughter as a dependent on his taxes...when he was not suppose to. We alternate every year per our divorce decree (finalized 2001) and he filed using her as a dependent - stated on his taxes that she lived with him for 7 months (not true). This was to be my year to claim her. I know that he is having major financial problems at the moment so I know why he did it.

I know that I can file a complaint with the IRS HOWEVER I plan on filing a violation of our divorce decree as well. Does anyone know where I file this violation? Supreme Court because it's a federal issue or would it need to be filed in support court? or does it get filed in custudy/visitation court? He lives in NY and we always file everything there even though I live in FL. I do not have any of my orders filed in this state (not yet at least) and in NY support and visitation/custody courts are separate.

ALSO, according to our divorce decree any return he gets he has to split with me 50/50. Maybe that can help determine where to file?

Can I just mention also.. I love this site... I hate having to keep going to court for silly things like this. Can someone help?

I am a tax professional and there is a way to resolve this problem without going to court at all.

You can file a paper return claiming your child as normal. You will recieve your refund in 4-6 weeks.

Later on in the year the IRS will investigate the duplicate claim, and will require the non-custodial parent to pay back the excess refund received for the child.

You don't actually have to file a complaint with the IRS. The duplicate claim will trigger the investigation.

Once he gets stuck with paying back money, he won't do that again. You can still take him to court if you want to.

 

[kristi729]

Thanks ... however... he did this to me once before during the 2006 tax year.. When I contacted the IRS then they told me that they can do nothing about it. Basically, whichever parent gets the child's SSN in on their claim first gets to use it unless I take him to court.

 

[mistoffolees]

Thanks ... however... he did this to me once before during the 2006 tax year.. When I contacted the IRS then they told me that they can do nothing about it. Basically, whichever parent gets the child's SSN in on their claim first gets to use it unless I take him to court.

That is not correct.

IRS rules are quite clear (and, compared to most IRS rules, fairly simple). Whoever has the child the most nights gets to claim the deduction. If the number of nights is the same, the person with the higher AGI claims the deduction. There are a few other tie-breaker rules, as well, although it's pretty hard to see how they'd ever come into play.

IRS rules can be overridden with a valid divorce decree. However, it can not be conditions (for example, 'person A gets the deduction only if they pay their support on time' is not valid). Or, one person can sign an 8332 form transferring the deduction to the other.

In your case, if you are convinced that you were entitled to the deduction, you simply claim it on your tax return. If he claims it as well, the IRS computers will flag the returns showing that two people claimed the same child as a deduction. You will each get a letter stating that the IRS noticed the error and ask you to check your return. If neither of you changes your return after the letter, the IRS will do a full investigation. At that point, you will need to be able to show that you had more overnights and/or that a valid court order gave you the deduction.

Whoever has the best evidence that they had the most overnights wins. The loser will pay back taxes, interest, and penalties.

 

[LdiJ]

Thanks ... however... he did this to me once before during the 2006 tax year.. When I contacted the IRS then they told me that they can do nothing about it. Basically, whichever parent gets the child's SSN in on their claim first gets to use it unless I take him to court.

That is completely and totally false. I wish I knew the name and ID number of the Agent you spoke to, because I would report them. The parent who files first is the only one who can file electronically, but all you would have had to do is file a paper return. You also can still amend 2006 to claim your child.

There are only three circumstances under which dad could have claimed them and nothing could be done through the IRS. 1) Dad has primary residential custody and the child spends the most nights with him, 2) you have 50/50 and that year dad had the child more nights than you, or 3) Its leap year and you and dad had exactly the same number of overnights and dad made more money than you did.

 

[LdiJ]

That is not correct.

IRS rules are quite clear (and, compared to most IRS rules, fairly simple). Whoever has the child the most nights gets to claim the deduction. If the number of nights is the same, the person with the higher AGI claims the deduction. There are a few other tie-breaker rules, as well, although it's pretty hard to see how they'd ever come into play.

IRS rules can be overridden with a valid divorce decree. However, it can not be conditions (for example, 'person A gets the deduction only if they pay their support on time' is not valid). Or, one person can sign an 8332 form transferring the deduction to the other.

In your case, if you are convinced that you were entitled to the deduction, you simply claim it on your tax return. If he claims it as well, the IRS computers will flag the returns showing that two people claimed the same child as a deduction. You will each get a letter stating that the IRS noticed the error and ask you to check your return. If neither of you changes your return after the letter, the IRS will do a full investigation. At that point, you will need to be able to show that you had more overnights and/or that a valid court order gave you the deduction.

Whoever has the best evidence that they had the most overnights wins. The loser will pay back taxes, interest, and penalties.

I need to correct something here:

The divorce decree must contain the signature of the custodial parent (in other words, it must be an agreement)

The divorce decree must be specific as to who gets what years.

The divorce decree must not be conditional.

This applies to 2008 back. For 2009 forward divorce decrees will not be accepted at all. Only form 8332 will be excepted. The word is that eventually form 8332 will be done away with entirely, and it will be up to the state courts to take the tax exemption into consideration when calculating child support. A handful of states have already done that.

 

[kristi729]

thanks and hey... jail time?

Thanks for the advice. I actually called the IRS back and spoke to a very nice woman who told me the correct info. I can send in a PAPER claim. She also informed me that I can send in a one page form (information referral) to have the IRS hold his money until there is a full investigation.

Our daughter lives with me in Florida.. full time. She visits her Dad only. What he did was flat out LIE. Our divorce decree most clearly defines who claims her for what year. I get evens, he gets odds. It does not however specify anything about a form - I saw on the IRS website that form needs to be signed by me allowing him to claim her? I never signed it.. EVER.

I sent in a request for a review last week to the IRS. I"m hoping that they jump on the investigation. I'm assuming (only because I know him SO well) that the rest of his return is full of lies. Any chance he can get jail time AND fees, penalties, etc?

 

[mistoffolees]

Any chance he can get jail time AND fees, penalties, etc?

Fees and penalties are almost certain if he is found to have submitted a false return and underpaid his taxes.

Jail time is very unlikely unless he refuses a direct court order to pay. It won't get to that stage for a while.

 

[LdiJ]

Fees and penalties are almost certain if he is found to have submitted a false return and underpaid his taxes.

Jail time is very unlikely unless he refuses a direct court order to pay. It won't get to that stage for a while.

Realistically jail time isn't likely at all. The IRS does not pursue criminal convictions unless its a high profile case or there is clear cut fraud and a lot of dollars involved.

However, what the IRS WILL do is hound every aspect of his financial life until they collect back the excess refund, plus all applicable penalties and interest. On top of that, if he claimed EIC (which I am nearly certain that he did, because of the 7 month bit) he will be barred from claiming EIC for ANY child, for a minimum of two years if the IRS rules it a non-intentional error, or 10 years if the IRS rules it flat out fraud. That means if he gets married and has more children, he may not be able to claim EIC for any of them for 10 years.

Ultimately that could cost him tens of thousands of dollars over that ten year period.

I have a new client who has a child of her own, that lives with her full time. Last year she not only claimed her own child for EIC, but one of her sister's children who doesn't live with her and she didn't support. The IRS is in the process of deciding whether she is barred from claiming EIC for 2 years or 10. If its two years its going to cost her about 7k total, the amount she has to pay back plus the amount she loses for the next two years. If its 10 years, its going to be about 27k-30k in total.

That's a huge loss for someone who works for minimum wage.

Claiming kids that you legally cannot claim is stupid. Claiming EIC for those same kids could destroy your life. Its NEVER worth it.