86

I have court papers showing that I have full and sole custody of my son and that he was with me like 99% of the year. I let my son's father have him a few weekends last year but only a handful.

My son's father told his brother that he should claim my son as a tax deduction and he did.

This happened last year too. My son's father filed taxes before I did and then when I filed my taxes and claimed my son as a dependent I was told by the IRS that my son had already been claimed (although last year it was the father claiming him - not the brother).

How can I dispute this?

neubert
  • 3,832
  • 4
  • 27
  • 48
  • 16
    Do you have documentation regarding the full sole custody? – JTP - Apologise to Monica Feb 20 '17 at 03:11
  • 14
    The repetition makes it sound like the father and the father's brother had a deal going on between them where they split the tax deduction or something. – user541686 Feb 20 '17 at 06:24
  • 54
    Arguably, you do not have to dispute this. File your own taxes correctly, be prepared to explain if audited, and let the IRS take care of swatting anyone who makes a false claim. If you aren't pushing at or past the boundaries of what's legitimate, an audit really isn't anything to be afraid of. – keshlam Feb 20 '17 at 14:02
  • 53
    Wouldn't this (the actions (of the brother) of the father) be considered tax fraud by the IRS? – SQB Feb 20 '17 at 14:14
  • 15
    @SQB: Probably. I would consider it tax fraud, and from what I hear the IRS is much more willing than me calling things tax fraud. – gnasher729 Feb 20 '17 at 14:27
  • 2
    @gnasher729 then perhaps the recommended course of action is telling the IRS that the ex and the brother of the ex are committing tax fraud by claiming a kid as a tax deduction without having custody and let the IRS sort it out. – SQB Feb 20 '17 at 15:09
  • 4
    @SQB The IRS has processes to handle this specific issue as it comes up a fair amount; go ahead and use them. – Joe Feb 20 '17 at 16:19
  • 3
    I'm very curious how the brother even makes an attempt to claim his nephew/niece. Father claiming I can see (though wrong), but uncle? – Joe Feb 20 '17 at 16:20
  • A math note, in case you use this number when you talk to the IRS. Assuming "a few weekends" means three, then the father's brother had him for 6 days, which is 1.6% of a year, so you had him for 98.4% of the year. If it was more than three weekends, then your claim that you had your son 99% of the year is definitely false in fact, even if true in intent. – NeutronStar Feb 20 '17 at 17:21
  • Relevant: https://www.thebalance.com/claiming-same-dependent-audit-risk-3193030 – TTT Feb 20 '17 at 17:21
  • 2
    Divorce decrees often explicitly spell out which parent gets to claim a child as a deduction for tax purposes, which is not necessarily the same as the custodial parent. This can actually be beneficial, as the non-custodial parent often is in a higher tax bracket, allowing less money to go to taxes and more to child support, which in turn is "baked in" to the decree. So what does your decree say about tax deductions? If it says you get the deduction, you might send a copy of what the IRS sent you stating who claimed the deduction. – Monty Harder Feb 20 '17 at 19:45
  • 2
    @Monty Harder - my son was born out of wedlock.. – neubert Feb 20 '17 at 19:55
  • 2
    @neubert Ah. That's what I get for ASS|U|MEing. Pretend instead of "divorce decree" I said something about a legal order that he pay child support. Is there one of those? If so, you have a judge that might be upset to know about your situation, and possibly willing to issue a contempt citation to the father and/or uncle over it. – Monty Harder Feb 20 '17 at 21:03
  • 5
    @SQB: Only tell them they committed fraud if you are 100% sure, otherwise it could be libel. Tell them the facts and let them draw their conclusions. – gnasher729 Feb 20 '17 at 22:00
  • Comments are not for extended discussion; this conversation has been moved to chat and further comments will be cleaned up aggressively. – GS - Apologise to Monica Feb 22 '17 at 13:06

5 Answers5

134

Your E-file return will be rejected if you are the second person to file, so you should file a paper return claiming your child, and you'll get your refund as you filed it.

You and the other party claiming your child will both receive letters from the IRS notifying you that someone else has claimed your child as a dependent. If neither party files an amended return, a second letter from the IRS will ask for proof, which you should respond to immediately with a copy of the court order.

As long as you have never provided form 8332 releasing your right to claim the child as a dependent, the IRS should accept your return and make your ex and his brother pay back the difference for their refunds with interest.

If you didn't claim your child because of this problem last year, you should also file a paper 1040-X to amend that return and claim the child.

Edit: There are quite a few comments with differing opinions about who should have full custody. Court orders often cover this scenario explicitly requiring the custodial parent to file form 8332 if the the non-custodial parent is assigned the tax benefits through the divorce decree. From the details shared by the OP, it seems like this case would clearly favor the custodial parent unless the divorce decree specifically assigned those rights elsewhere which the OP should have been aware of.

NL - Apologize to Monica
  • 32,709
  • 19
  • 85
  • 144
  • 1
    This might be tangential to the question, but why would the IRS block an e-file with duplicate info, but be willing to go ahead and refund first & sort it out later with paper filing? – Bobson Feb 21 '17 at 00:15
  • 11
    @Bobson Probably because their electronic system only accepts if everything submitted makes perfect sense and doesn't require a human to look at it. – Andy Feb 21 '17 at 00:44
  • 6
    @Andy - I see. The electronic system can say "This doesn't make sense, block it outright so we don't have to deal with it", whereas having the paper return means "Shoot, we already have it. Pay them what they wrote down, and we'll flag it to fix later". – Bobson Feb 21 '17 at 00:52
  • 24
    @Bobson Of course I don't know for sure, but that would be my guess. The paper return would likely have someone key in or scan in the return, something could pop up on the screen, then the guy presses the giant red Audit button on his desk, and the black helicopters are dispatched to the filers residence. – Andy Feb 21 '17 at 00:58
  • 18
    @Bobson When trying to understand the IRS it helps to stop using logic. – corsiKa Feb 21 '17 at 03:43
  • @Bobson: Because the father/brother filed first, the return was processed, and the refund sent before the OP submitted a return? – jamesqf Feb 21 '17 at 06:05
  • 14
    With the software I use (HR-Block), if the return is originally rejected, you can refile it via e-file "with exception". This means that the IRS will accept the return even though there are problems with it. They then contact you for details about the issue (according to the software). In my case I was able to resolve the dependent issue before needing to send it again, so I don't have experience with how the IRS contacts you. – Keeta - reinstate Monica Feb 21 '17 at 12:45
  • 3
    I'm a bit unsure about the "get your refund as you filed it". In my experience if the IRS has a question about something like this, they send you a letter saying your refund is on hold, and then you get the letters, etc. It wasn't exactly the same situation, so I could be wrong, and the rest of the answer seems spot on. I would just warn that the OP may experience a delay in their refund given the objection, just so they aren't counting on money appearing on a strict schedule. – BrianH Feb 21 '17 at 18:32
  • 4
    Its very important to note that in the absence of a signed form 8332, the IRS cares only about who meets the criteria for claiming a dependent. The custody papers (court order, etc) do not matter, the proof the IRS cares about is evidence that you paid for >50% of the child expenses. If the divorce decree specifies the non-custodial parent gets to claim the child, that parent must go to court to get a form 8332 (if the other parent won't give it willingly), the IRS will not accept the decree itself. – mbrig Feb 22 '17 at 23:26
  • @mbrig be aware that if the father is paying a large amount of child support (not necessarily the case here) then he may be paying for most of the child's expenses and thus the child would be deductible for him rather than the mother. I'd be willing to bet that's not the case, but it's something to consider. – Doktor J Feb 23 '17 at 17:35
  • 1
    @Bobson because e-file isn't really filing, it's an electronic courtesy request, asking the IRS to take some bits and bytes instead of filing so all parties can save some processing costs. IRS can say no. A properly filed document has legal force, meaning it is binding on both sides. You swear by the numbers and IRS can't refuse the document and claim you didn't file. You submit an order to a vendor, you file a lawsuit. – Harper - Reinstate Monica Feb 26 '17 at 17:51
  • @mbrig indeed, custody is decided in the State court, which cannot compel the Federal IRS to do anything. – Harper - Reinstate Monica Feb 26 '17 at 17:58
  • @Harper - I don't know if that's actually accurate or not, but it makes a lot of sense. – Bobson Feb 27 '17 at 04:50
  • 1
    @Harper the way a state court compels the IRS is by compelling the custodial parent to provide form 8332, if indeed that was specified in the terms of the judgment. – NL - Apologize to Monica Feb 27 '17 at 12:57
77

You need to call the IRS at 1-800-829-1040 and explain that you are the custodial parent. The IRS service representative will tell you what to do.

Generally what will happen is that you will re-submit your return and the IRS will examine claims of both parties and decide who gets the dependent.

Five Bagger
  • 9,785
  • 6
  • 41
  • 75
  • 2
    That can be a pretty awful proposition depending on the time of the year. Most of this can be accomplished with a well written letter. – Pete B. Feb 21 '17 at 15:39
  • 11
    @PeteB. The IRS specifically recommends calling them in cases of disputed child dependency. – Five Bagger Feb 21 '17 at 17:28
  • 2
    I was given the advice to write a letter from a CPA, and it worked for me. As I said, no phone call was necessary. I guess you could craft the letter while waiting on hold! – Pete B. Feb 21 '17 at 18:38
  • 6
    Their advice will be to file a paper return (and an amended one for last year). The conflict will trigger a conflict resolution routine and a case will be started where IRS auditors will get to the bottom of it. This is a duplicate question, asked every year. My tax software even has it as a FAQ where they advise to fill out your taxes properly and file paper if you can't e-file. – Xalorous Feb 21 '17 at 19:53
  • 12
    @FiveBagger, If that is the official recommendation, please provide the source for where the official recommendation is made. Doing so will make your answer significantly stronger. – Makyen Feb 22 '17 at 00:19
17

I would highly advise you to speak to a lawyer. Given that the court gave you full custody of your child, then you are the one to claim him as a dependent. The IRS doesn't know the outcome of your divorce, therefore they had no way of knowing who has custody, they go off of who filed first.

Michael
  • 10,208
  • 4
  • 24
  • 56
  • 23
    There's no need to sue here, the IRS will decide who wins and collect from the losing party. – NL - Apologize to Monica Feb 20 '17 at 16:03
  • 25
    A lawyer is almost certainly going to charge more than most people could expect to collect from a dependent deduction. – jamesqf Feb 20 '17 at 18:55
  • 4
    Keep in mind that legal custody does not necessarily define who may claim a child as a dependent - that often falls under the "50% support test." You wouldn't sue the "non-custodial" parent; just file an amended return, and let the IRS sort out the dual-deduction claims and tell you what THEY think constitutes "correct" proof... – David W Feb 20 '17 at 20:03
  • I agree with talking to a lawyer, but sue whom? There is nobody to sue here except the IRS, and that's not the appropriate process. – user207421 Feb 21 '17 at 01:51
  • 3
    You don't really need a lawyer, just a well written letter. – Pete B. Feb 21 '17 at 15:39
  • Custody doesn't automatically grant tax-dependent status. In the absence of some decree/agreement, the parent who can document paying more than half of child expenses can get the exemption. But the brother...? Probably not, regardless of parental custody arrangement. – user2338816 Feb 22 '17 at 18:34
16

A not dissimilar thing had happened to me. Nathan's answer is correct from a technical point of view, but you should also provide a letter to the IRS and selected highlighted pages from the court order. The letter should state your situation and point out areas of the court order that supports your claims.

Doing this, in my case, prevented the IRS from sending me a letter and only sent a letter to the incorrectly claiming party. That party could not dispute my claim, so I am pretty sure they had to amend their tax return.

In subsequent years, you might also want to send a very similar letter, that points out the troubles you have had in the past and that you just want to be proactive. Again it would highlight the areas of the court order that supports your claims that you are able to claim your child for the year in question.

Pete B.
  • 76,481
  • 16
  • 167
  • 236
4

Per internal protocol, ANY additions to a HARD COPY tax return,
(threat, joke, serious material, etc,) are put aside for review, accordingly.

So be proactive; Don't e-file, if you want to win this.

Include/staple the court order (move the relevant page to the front) and a cover-letter statement (in front of the court order) that you know another individual (include name/address/phone#s since you prob don't have SSN) has been illegally trying to claim your child.

For yourself, Include an a phone number and maybe an email address (create a new gmail that forwards to you, so ONLY the IRS (and no spammers) know/have it. Odds of it being used are low, but what the heck.

Forwards are easy to set up, through account settings (the little gear on the Top-R of gmail's screen). If you get a reply back, remember to use the appropriate email account.

Mention the number of years this has been going on and re-state the court order date precludes this, and you formally want charges filed upon the offender (and that you want to be informed of the case number, as he has defrauded you by mail-fraud).

NL - Apologize to Monica
  • 32,709
  • 19
  • 85
  • 144
TeslaCoiled
  • 41
  • 2
  • Creating an email account is a waste of time; the IRS won't respond via email. Demands for criminal charges will also be ignored. The IRS determines what's criminal, not taxpayers. – Carey Gregory Jan 29 '19 at 18:05