Will I Go to Jail for EIC Fraud?

Manifest Destiny

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I often hear the question, “Will I go to jail if I cheat on my taxes?”  People see celebrities go to prison all the time, most recently Richard Hatch, the guy who won a million dollars winning “Survivor” has been all over the news.  He spent four years in prison and could go back again.   Note:  if you win a million dollars on national television, it’s safe to assume that the IRS knows about it and is looking for it on your tax return.

But what about EIC fraud?  What happens to you when you claim a child that’s not yours, or if you allow someone to claim your child when that person isn’t the parent?  What’s the punishment there?

If the IRS examines your return and finds that you cannot claim EIC, the worst case scenario would be that they impose “civil fraud” penalties on your return.  The penalty for civil fraud is 75% of your underpayment of income tax.

Say for example that you involved yourself in a scheme where you claimed children that didn’t belong to you over the course of three years.  The difference between what you received as a tax refund averaged $5,000 more each year than if you didn’t illegally claim those children for a total of $15,000 in excess refund dollars.  When the IRS catches up with you, they will demand their $15,000 plus another $11,250 for the penalty which would make your balance due $26,250.  Add to that the interest you’d be charged and you see how costly this is.

What makes this even worse is that if you are charged with civil fraud the IRS can then turn the case over to the Criminal Investigation Division for prosecution.  You could face both civil and criminal penalties at the same time—meaning they put your butt in jail, levy your bank account and put a lien on your house and any other property you own.

Most people who get caught for EIC fraud don’t have the money to pay back the tax owed, not to mention the added fines.  And of course, the higher the dollar amount owed to the IRS, the higher the likelihood of criminal charges.  So you really don’t want to hear the word “fraud” if the IRS comes calling.

But that’s the worst case scenario, fraud is pretty dangerous stuff, and they have to be able to build a case for it.  One of the key points of fraud is that you knew you were doing it.  I once spoke to a potential client over the phone, she had received an IRS letter and they were charging her penalties for fraud.  As she explained her case, she kept insisting that “she didn’t know.”   I thought there might be a case for her so I asked, “You mean you didn’t know it was wrong to claim someone else’s child?”  She said, “No, I didn’t know I could get caught.”  That’s not going to get you off of fraud charges.  I gave her the name of an attorney—if there’s a possibility of criminal charges, you’ll want the tax attorney over the EA or CPA.  (EAs and CPAs have client privilege for tax issues only, for criminal cases, only an attorney has privilege—meaning what you tell them, they can’t tell on you.)

In most cases though, a much more likely scenario is an accuracy related penalty—that would be 20% of the under-reporting.  Let’s say you live with your girlfriend, she has a kid, she said you could claim the kid; you don’t know it’s illegal but you get caught.  You’ll have to pay back the EIC plus the accuracy related penalty.  If the EIC difference was $5000, then you’d add another $1250 making the balance due $6,250.  The IRS would add interest to that as well.

Generally, if you lose an EIC audit, you’ll also be banned from claiming EIC for somewhere between 2 and 10 years depending upon the severity of the case.  That’s probably the worst penalty for most people.  Many of the people who get in trouble for EIC generally are able to claim EIC in other years.  Being banned from EIC for 10 years can cost a person over $50,000.  That’s a lot of money.

Accuracy penalties usually involve amounts of over $5,000.  If your EIC underreporting is less than that, you’re more likely to pay “late payment” penalties which are equal to ½ of one percent per month.  For example, you file your return in February of 2008, in March of 2010 they catch up with you.  This means that the penalties have been adding up for 24 months, you’ll pay 12% for the penalty, plus the interest owed.  Let’s say you only got an extra $1000 for falsely claiming EIC, you’d have to pay back $1,120 plus interest of course.  The IRS will always get their interest payment.

But what if it’s not my fault? That’s a very common question.  What if it really isn’t your fault?  What happens if you went to a preparer that didn’t know any better and claimed EIC for you when she shouldn’t have.  Or worse, you had a crooked preparer.  (These things really do happen.)

You’ll have to report the preparer.  There are serious fines and penalties for tax preparers associated with EIC negligence and fraud.  The smallest, yet the easiest to prove, is the EIC due diligence paperwork.  For every tax return that has EIC on it, a paid preparer must have a form 8867.  Here’s a link to see what it looks like:  http://www.irs.gov/pub/irs-pdf/f8867.pdf

The link is to the official IRS form.  In my office, my computer software actually uses the same form but I’m required to sign it and have my client sign it as well basically stating that everything on the EIC form is true.  Here’s the thing—the IRS can call up any tax office at any time and say, “Hey, we’re coming to audit your 8867 EIC forms.”  As the owner of a tax business, I have to be able to pull them all and have them ready for inspection.  If I don’t have an 8867 form for every EIC tax return I prepare, its $100 for each one I’m missing.  Guess what, I’m not going to be missing any of those forms.   I can’t afford it and I don’t prepare that many EIC returns.  You can bet that an office with lots of EIC returns has itself covered in the forms department.

So here’s where I’m going with this, if your preparer really is crooked, do report him to the IRS, it’s the right thing to do.  But if you lied to your preparer about your relationship to the child you claimed or some other EIC offense, and the IRS goes to the preparer’s office and pulls the 8867 forms, and they find a signed affidavit with your signature saying that you are the actual parent of the child—now you’ve just proved that you committed a fraud.  That’s the last thing you want to do.  Remember, a plain error costs a lot less than fraud and there’s no jail time involved.

So what should I do if I receive an EIC audit letter?  If you have the rightful claim to EIC, fight it.  If you’re not sure, maybe you do, maybe you don’t—seek professional help.  I’ve seen innocent people lose EIC audits because they didn’t know the rules.  Don’t take chances, it’s too costly.  If you know for a fact that you should not have claimed a child, pay up and get it over with as quickly as possible.  It won’t be easy, but in the long run it will be better for you.

If you know that you’ve illegally claimed EIC, don’t wait for the IRS to come after you.  File an amended return and pay the tax.  You’ll definitely have to pay interest, but by filing an amended return and paying before you get an IRS letter, you have a very good chance of avoiding the penalties.  You’ll probably sleep better too.

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Note:  We try to answer all the questions that come to us but please be patient.  It’s our busy season right now.  We may not get to your post until the weekend.  When you make a post and use the capcha code, it won’t immediately show up.  You see, for every normal person like you that posts, there’s about three advertisements for things your mother wouldn’t approve of.  (We try to keep this a G rated website.)   We have to edit those out.  If you need an answer right away, here are some links that might help:

EIC questions of any kind:  http://www.irs.gov/Individuals/Earned-Income-Tax-Credit-(EITC)-%E2%80%93–Use-the-EITC-Assistant-to-Find-Out-if-You-Should-Claim-it.

How to find free tax preparers:  http://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers

How to find your local IRS office:  http://www.irs.gov/uac/Contact-Your-Local-IRS-Office-1

If you want to hire us, please call (314) 275-9160 or email us.  We do prepare returns for people all over the country (and a few foreign countries as well.)  We are sorry but we cannot prepare an EIC return for someone outside of the St. Louis area because of the due diligence requirements.

539 thoughts on “Will I Go to Jail for EIC Fraud?

  1. Ok. So I filed my 2013 taxes and everthing was fine… Or so I thought. I remember my mother saying I could claim my younger sister, so just to see how it would figure my EIC, I input a random name and numbers for the ssn… I deleted that information, OR SO I THOUGHT. Turns out I hadnt, and the IRS wound up giving me that credit. i hadnt noticed until just now because I was also in school and I thought the additional.money was the education credit… Honestly, if I never wouldve downloaded my 2013 return (trying to find my employers ID) I never wouldve noticed… What can I do? It was a complete ACCIDENT!

  2. Hi i have a question…i claimed three kids that are not mine, i gave the mom have of my return which was around 3500…i dont know the kids at all and i was wonderind can i go to jail or get fined for this?

  3. Hi,

    My husband and I have joint custody of his daughter (50/50), he still pays child support, and she is covered by his insurance. They went to court 3 years ago for all of this and he has court ordered papers that state he gets to claim his daughter as a dependent AND EIC every year. For the last 2 years his taxes have been denied because someone else has claimed his daughter. We found out it was her mom. She is claiming the EIC for her. So we have to paper file his taxes every year with a copy of the court papers saying HE gets to claim her and wait 2 months for his return. We believe she did it again this year. So my question is, how long will the IRS let this go on? Will they eventually flag her taxes or something so this doesn’t happen every year? Won’t she eventually have to pay all that money back? It just gets a little frustrating having to do this every year!

  4. I have a Question I Am On Section 8 And My Sister wants to claim My Daughter But My sister is not on my section 8 Will I get in trouble if she claims my daughter on her tax return??

  5. I have a question.. My gf wasn’t able to claim her 5 yr old on her taxes cause she didn’t make enough. And the child’s dad already did his taxes. Is there any way I can claim the child? Iv supported her for almost 8 months now but she’s not my blood..

  6. I’m so glad i found your site! I hope you can help. Here’s our situation.
    My gf and i had to move in with my disabled mother last year after loosing our place. I have 3 children. She is the only one working and is supporting myself and my kids as well as giving my mother money on the bills. We went to the same tax place we went last year who informed us they lost our records BC there is a new owner. The copy of the taxes we can’t even read BC their printer was out of ink. My gf got a $500 advance and a few days later went online to where’s my refund and it said: we are reviewing your refund and need more information we will be sending you a letter within thirty days explaining what we need. So my gf worried there might be an issue. She had the tax preparer go over her taxes and found out the preparer had listed my three children as my gf’s nieces and nephew.
    The year before we had our own home and my gf was the only one working and she claimed my children (2 kids at that time) but now we wonder what they listed her relationship with them was last year..
    Were upset BC we really needed the money for bills and now it’s going to take time.. But now we’re worried that well get audited and we don’t save reciepts etc. No reason to ever save them. We just are lost and don’t really know what to do at this point. I heard that is you do an amended return that your for sure getting audited.. So we don’t know what to do..
    My gf has supported my children, so she does have legal right to claim them, right? Please help and advice would be greatly appreciated.

  7. I asked a question and was wondering how long it takes to get a response. Also, how do I find the comment again to look for my answer? Thanks so much

  8. I am divorced with one child. We have 50/50 shared custody, with alternate years of being able to claim our child as a dependent.

    Exwife will claim dependent exemption for 2014, but I’d like to file as HOH, which would benefit me with am extra $1500 refund.

    Problem is, I don’t have records to show our child lived with me more than half the year. It could have been a few days over or under half.

    Should I claim HOH and risk an audit?
    Should I consult with Exwife to determine how she will file, and file opposite?
    Or should I just file single?

  9. Hi Melissa,
    Eventually she should get caught and have to pay the taxes back, but I hear about these things all the time. And you’re the one who has to wait and paper file and all that. I tired filing a petition to get PIN numbers for children in these cases–I lost. The Treasury Inspector General’s office (who I suspect has a little more influence with the IRS than I do) has suggested something similar–it ain’t happening.

    So, in the meantime, people like you are stuck paper filing their returns and waiting months for their refunds. Sorry. I wish I had a better answer for you.

  10. Hi Erica,
    So here’s the real question–who does your daughter live with? Does she live with you or your sister? Or both?

    So, if your sister is living with you, and she’s not on your Section 8–does that mean you’re cheating the Section 8 housing people?

    If the answer to that question is yes, then you have your answer to your question.

  11. Hi Brigitte,
    Okay, you need a new preparer.

    Your girlfriend is not your children’s aunt. There is no blood relationship–but the prepared listed her that way. So who lied? I’m betting she signed a statement claiming the relationship–because if she didn’t — it’s a $500 fine to the preparer.

    I recommend amending the returns before you get caught. Now, if no body else claims the children, she could possibly claim them as dependents–but not for EIC.

    Another option is for your mom-who you were living with, claim the kids for EIC. That would be legal–if your mom had any earned income.

    Where is the children’s father in all of this? What’s his role? If he claimed the kids on his return as dependents–he could get you audited anyway. So, fix your returns now. Better now than to have to deal with the penalties later.

  12. @Briggitte,
    During tax season, it takes a long time to get an answer. And, you’ll need to scroll to the bottom to find yours. I usually answer on Sundays. If you ask on a Sunday, then it will take a whole week. This week, there’s over 60 questions in my in box (after the spam is filtered out) so I’m not sure I can get through all of them. But I try.

  13. Dear Scared,
    You need to file an amended return. Pay back any extra refund that you got. Do it before April 15th and that mistake will never be recorded because your “permanent” tax return is what gets filed before April 15th.

  14. Hi Jorge
    So you’re not likely to go to jail, but the fines will be the entire amount of the refund, plus up to 25% for a late payment fee, plus 20 – 40% penalties for fraud. I recommend amending your return ASAP and fixing that mistake before the IRS catches you.

  15. In 2011 and subsequently in 2012 I claimed HOH and also claimed my son. Problem is I shouldn’t have claimed HOH but married filing joint. For 2011 I received EIC. For 2012 they actually reversed the whole tax return (I believe because they didn’t have a copy of my W2) and I never actually got anything. I have been meaning to amend these returns since last year. Now the IRS is auditing a C corp I have connections with and as a result need my tax returns. I have now amended the returns although I have no idea how long it will take the IRS to receive them and input everything. For 2011 I amended to married filing seperate, still claiming my son, and for 2012 I actually amended my husbands return to include my information, since they had taken my W2 out I figured that was the best way, so for that year we are married filing joint. My question is, will amending these returns bring about more attention to look into this case or will it look better that I fixed the mistake before the audit? Once again it isn’t an audit on me personally but the business however as mentioned they need my returns. I am so stressed and literally having nightmares about this. Also is this something I could be facing fraud charges for?

  16. My wife left our family which includes her 3 biological son’s over 4 years ago now. Just recently she told me that she had been claiming the children on her taxes. She clearly does not live with them and pays little and closer to nothing as far as financial support. I have been raising them and financially supporting them on my own now since the day she left. I do not have an taxable income and have been raising them through my inheritance so I have never claimed them on my taxes. I’m very upset because my wife just walked away from her own flesh and blood without a single concern about them in the slightest. If that is disgusting enough, I find out she has been profiting from the decision for the past 4 years? Maybe she is entitled to claim them but it sure doesn’t seem legal to me. I decided to report her and let the IRS know what she has been doing. Can she legally claim them and do you think she’ll be facing any kind of serious consequences for what she has done? My God, she has only seen these kids 10 days in the last 5 years.

  17. Hi Jan-
    So like alot of people on here i did not realize could not claim my boyfriends child though i supported him fully. I of course was audited and had to pay back 8000.00 including the year before when i had also claimed him. I have paid everything back but never was notified that i cannot claim eic or hoh in the future? I call and they say they don’t see anything saying i cannot claim eic now? How would i know if i am barred from eic as i have two children of my own that i did not have at the time

  18. HI, I AM BEING AUDITED FOR EIC, DEPENDENTS, AND FILING STATUS, I AM 23 YEARS OLD AND HAVE ONLY FILED SINGLE 2 YEARS NOW.MY GODSISTER CAME TO ME ABOUT CARRYING HER KIDS AND I AGREED. I HAVE PROVIDED FOR HER KIDS ON SOME OCCASIONS, BUT I DID NOT KNOW THAT I WOULD GET N TROUBLE FOR DOING SO,, I DONT KNOW WHAT TO DO CAN U PLEASE HELP? SHOULD I DROP THEM AND AMEND THE RETURN, OR TRY TO PROVIDE THE INFORMATION THEY WANT ?

  19. My wife left the family in September of 2011. She left behind 3 boys who are biologically her 3 children; She has been claiming them on her taxes ever since she left. I have been taking care of these children without any financial support from her and really don’t feel as though she has the right to claim these children when she offers to no financial or any other support. They also live with me 100% of the time. She has seen them a total of 10 days in the last 4 yrs. Can she legally claim these children simply because they are biologically hers???? I would think that in order to make a claim on them that she would have to financially support them or at least have them living with her but this isn’t the case at all. Also, would I then have a right to claim them? I’m sorry but I don’t understand the tax laws at all. Thanks.

  20. I have claimed my little sister for 2 years, but I never changed my “single” status to “head of house” with my employer. She does live with me and I pay anything she needs, but she wants to move back with our mom next year. Will they audit me because, I did not change my working w-2 (papers you sign when you first start) and she moves back?

  21. Hi Stressed,
    First, I think you need professional representation on this. It’s standard operating procedure for the IRS to ask for your personal returns when they are auditing your business. But, given that you’ve done some things that are a little questionable, you want representation.
    It definitely looks better that you fixed the mistake before the audit, but you should sit down with a professional and talk about this issue face to face. It will be money well spent.

  22. Hi Michael,
    If you are still married, she can claim them, but not for EIC. But it all depends upon how she files.
    If I were you, I’d file a zero dollar tax return claiming your sons as dependents. You must have some income since you’re living off of your inheritance–interest or dividends. Even if you owe no tax, you can still file a return. By doing so, you’re using up their social security numbers and keeping her from claiming them in the future. (You can also file back tax returns doing the same thing.)

  23. hi

    im a stay at home mom and my fiancé supports me and our 3kids. 2 of the children

    we share together and my other child is from a previous relationship, My fiancé pays

    all bills and we all live together under the same roof for 4yrs now. i allowed a friend of

    mine to claim 2 of my children one which is for my fiancé and i, and the other thats

    from previous relation. my fiancé claimed our child that we share together last year,

    but he’s never claimed for the child that we don’t share together, with this said i feel i

    made a big mistake . i was trying to help my friend out because she needed some

    financial help and she doesn’t have any dependents of her own to claim. she asked

    me and i said ok. i didn’t really do it for the sake of myself but more for her, because

    she’s needed the help. my fiancé wasn’t really gonna claim our child that we have

    together cause he has other children from previous marriage that he supports and

    claims for. my friend did tell me she would give me a lil money out of what she

    received, but then we had a argument and she decided to give me nothing, i know I’m

    totally at fault for allowing her to even claim my children, and my fiancé is very upset

    that i did this and now he wants to claim all of us this year, including myself and my

    daughter that we don’t share together and our other two kids because his ex wife will

    be claiming his other children this year. He is very upset with me and i don’t know what

    to do because I’m no longer friends with that girl and she’s now saying how my fiancé

    can’t claim for kids cause she already claimed for them and that he will get audited,

    she’s basically trying to scare him from claiming his own child that she has no right to

    at all, she is no blood relative, just a friend i tried to help, and to backfired on me. this

    will be the second time that she claimed for the child that is only mine alone, now she

    says she doesn’t care if she has to pay back irs but she doubt that will happen. she is

    acting like my kids are her kids and she has more rights over them than me and my

    fiancé , when she isn’t even related to us. she has no proof of no nothing for my kids

    my fiancé makes over 150,000.00 and he needs to do his taxes before the deadline but we have this issue, can u help me on what we can do please?

    can my fiancé claim for our daughter, even though she claimed for her already?

    can he claim for my daughter (his non biological ), that she also claimed for?

    can he claim for me, since we live together and he supports me?

    since I’m the parent of the child that we don’t share together, and my fiancé supports us both, does it look better for him to claim me along with my daughter ? even though my ex friend already claimed my daughter? would it give him more right to claim her as a dependent over my ex friend that already claimed her?

    thank u for ur time!
    .

  24. My husband has a child that is us citizen jn mexico with a mexican mother with a visa, she is letting her cousin us citizen to claim her/his daughter and get money from that, she threatened my husband he better not claiming her because she is doing it, what could happen to her since she lives in mexico and to her cousin that lives in texas

  25. Hi Audrey,
    If you are barred from claiming EIC you would have gotten a letter about it. Go ahead and claim your actual children. When you’ll filing taxes, there’s a question about if you have even been denied EIC in the past–yes you have But you’re allowed to claim your own children (if of course you meet all the other requirements.)

  26. Hi Kayla,
    Since you’ve already been contacted by the IRS about claiming children that you shouldn’t claim, it’s too late to go and amend your return (unless you’re amending for a year you haven’t been caught for yet.)
    I’d just go ahead and pay the tax–you can’t claim the EIC.

  27. Hi Michael,
    your wife left back in 2011 and she’s still claiming the kids? No, she can’t!

    They’re your kids! No even if you are not the biological father, you became their legal father when you married their mother.

    So, you have residency and relationship–two of the big deals in claiming the kids for EIC. They’re yours to claim.

  28. Hi Sarnold,
    You’re fine. The W4 working papers are just to identify how much tax you want withheld from your paycheck. It’s not a document that goes to the IRS at all.
    So if you’re claiming single, that’s fine–whether you’re able to claim your sister on your tax return or not. It just tells your employer to withhold more money from your paycheck to pay for your taxes. That’s all it means.

  29. Hi Kay,
    I realize you were looking for an answer before April 15th but I was too busy working on tax returns. I apologize for being so late.
    First-you know you did wrong letting someone claim your kids so I won’t beat you up over that.

    Now–your fiance of course has every legal right to claim his own kids. Done deal. If your friend claimed your fiance’s child–well then she’s going to have to face the music on that.

    Now, the child that’s not his–your fiance’ isn’t going to get EIC on this child, and he won’t get a child tax credit. But at an income of $150,000 it will still help him to have the exemption. And–since he’s been living with the child for the entire year and he supports the child–it’s fine to claim him.

    And, if you make no income, then your fiance’ can claim you too. Same rules apply to claiming you as to claiming your child.

    Now–here’s the problem. The friend (and really, if friend the right word? She’s no real friend.) Anyway, if this “person who used to be a friend” claimed kids she shouldn’t, then your fiance’s return is going to get rejected when he efiles.

    But–he’s in the right, so he can just paper file his tax return and let the audit begin. And that’s okay because he’s got a winning case.

  30. Hi Jan. Thank you for being so faithful to answer every question over the years on this forum. I tried to read them all looking for a similar question to mine. Please forgive me if it was asked and then answered.
    I am amending my 2012 return to file a joint return and claim my son. He was born that year in the Philippines and I came back to the US and worked the last few months of that year. I supported him and my wife, except for housing, and they lived with her parents in the Philippines. They came late 2013 and have ss# now, he was born a US citizen. Can I receive the eic for that year? I will list him as a dependent that did not live with me in the divorced separated column, though it was just part of the immigration process that we were separated.

  31. Hi Justin,
    Here’s a link that should help: http://apps.irs.gov/app/eitc2012/Return_To_Start.do

    It’s the EITC assistant. You answer questions and it tells you if you will qualify for EIC. I think you may have a problem qualifying for EIC if your wife is not a US citizen. And since she was in the Phillipines, she wouldn’t qualify as a resident for that time. That would keep you from qualifying for EIC.

    You could still get the benefit of married filing jointly and the child tax credit, just not EIC.

  32. Hi I have been living in Trinidad with my son who is an American citizen for the last 12 years I was married to an American an citizen and separated 2 years after were married he has been filing taxes for my son and I for the last 12 years and we are not together nor have I been to florid a in 12 years can he go to jail for this ?

  33. Hi Reshma,
    That’s a good question. He probably won’t go to jail–usually you have to have over $40,000 of fraud in a single year to get to a prison type sentence. And if he’s not claiming EIC, then he might not be in trouble at all. But let’s take a look at what he can and cannot do.
    First, you are separated and still married. So–even though you are out of the country, he still technically may claim that he’s married with a child on his income tax return. He can’t claim EIC on your child since your son lives in Trinidad with you, but we can’t prove what he’s doing on his tax return.
    If he is filing as married–then he should also be reporting your income that you’re earning in Trinidad on his US tax return. I suspect he’s not doing that either.
    So how do you stop him from claiming your son on his taxes? Since you were married to a US citizen, at some point, you elected to be treated as a US citizen for tax purposes. (Okay, you probably didn’t make the formal election, but filing jointly it was implied.) I would file a US tax return, showing no US income. Report your income earned in Trinidad (claiming a foreign earned income exclusion on form 2555) and claim your child as your dependent. File as married filing separately so that you put your husbands name and social security number on the return. That gives the IRS the heads up to what he’s doing.
    Does it do you any good at all? No. So you’re only doing it to stop him. You’ll have to decide if it’s worth it to you to do that. Is he paying child support? Is he doing anything for your family? If yes, then you might want to let him continue filing with you and your son on the return. If not–go ahead and do what you need to do. Good luck.

  34. Since 2012 our Daughters boyfriend has claimed their first son on his taxes( he was born at the end of 2011). She ended up having another child by him July 2014. The father has never lived with them or supported them. Our Daughter doesn’t work, her and both of the children have always lived with us and been supported by myself, although my only income is SSI, I don’t file taxes and my wife cares all of us Our Daughter moved out for almost a month in May 2015 because we decided to tell her, that her boyfriend, the father of both children, was no longer welcome at our home for various reasons; stealing, drugs, not supporting his children, etc. The boyfriend got our Daughter to claim they where homeless when they weren’t and received food stamps in another county plus received medicaid Both children stayed with my wife and I the month she was gone and both children and our Daughter were receiving Medicaid and WIC benefits in the county they’ve always lived in and still do. The boyfriend is still receiving Medicaid while having worked at 3 different jobs and he claimed the oldest son again in Jan.2015 AND for some reason he had his Father ( who lives in Shelby, NC, claim the youngest child in 2015, the child just turned 1 year old in July, 2015. I suspect this was due to the boyfriends fraud of Medicaid at the Burke County Department of Social Services in Morganton, NC. Now we’ve heard that the boyfriends mother is trying to convince our Daughter to let her carry both of the children for the up coming tax year. Not of these people have ever done one thing to support either of these 2 sweet, innocent children. I plan to report the boyfriend / father of the children AND especially the Father of the boyfriend for collecting money for the youngest child. I also want to put a stop to the boyfriend’s Mother for planning on claiming both children as dependents for either the EITC or CTC.
    How do I go about stopping these terrible people from making money from these 2 children that they have never lived with or supported in anyway?. If our Daughter could possible get into trouble, if she helped, than so be it. My wife and I haven’t seen any evidence of our Daughter or our Grand-Children benefiting financially at all. My wife and I are responsible for any and all transportation, extra food, diapers, clothes, toys, doctor/dental visits,and more for our Daughter and both children. How do I put a stop to this ASAP? Thank you.

  35. Hi Tim,
    I can’t help you with state or county agencies. All I can tell you about is IRS stuff. I just need to put that out there.
    Sounds like you’re ready to do battle over this. So here you go.
    You don’t file taxes, but your wife does? That’s where you put the daughter and the baby. I’m guessing your wife is not the mother of your daughter, but if your wife is married to you, then she is the step mother, and that gives her a legal claim to claiming your daughter and her child.
    If you are not legally married to your wife, then she will have no family relationship, and not much of a claim, at least not for EIC. Maybe for an exemption.
    You could file a zero income return just to mess things up for the boyfriend.

    So the biggest question is: what’s best for the children? How will they benefit by you filing papers? Is there any good for them to come out of it? You may want to sit down with a local preparer and see what you can do.

    If filing tax papers can put food on the table and pay for diapers for these kids–great! I’m all for that. If filing paperwork is only going to get your daughter and her boyfriend into trouble and make them hate you–, as much as I disapprove of what they’ve done, they are your grandchildren’s parents and you’re going to be dealing with them for a long time. So, once again, what’s best for those kids?

    You’re the only one who can truly answer that. I think you’re looking out for their best interests so you’ll make a good decision. Good luck.

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