There’s a big difference between accidentally claiming your child and criminal tax fraud.
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, Richard Hatch, the guy who won a million dollars winning “Survivor”was been all over the news for awhile for tax evasion. He spent four years in prison. 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. Other celebrity tax evaders include Wesley Snipes, Darryl Strawberry and Willie Nelson. (And the list goes on and on….)
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 under-reporting 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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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
My sister has been living with me for the last 8 and a half months. She has a son (my nephew) who lives with us as well. She is not working at the time and im the one that supports both her and her son. When i get my tax forms in the mail and go to a preparer is it possible for me to claim him as a independent? Or is that bad for me to do so. And what will i need to prove all of this to the preparer?
Hey Leelee,
you can get all of your 2011 w2 information from the IRS. Call 1 800 829-1040. You are going to ask for a “wage and income transcript” for 2011. It will have all of your federal W2 information right on there.
(You will be on hold a long time, but they’ll get you the information. They will even fax it to you if you have a fax machine or access to one.)
Hi Leelee,
Okay, the cold hard fact: 1.2% of tax returns get audited. So that’s about 1 for every hundred tax returns.
Now, if the rightful parents decide to claim one of those kids she claimed illegally–well then the chance of an audit just went up to about 95% But only she knows how much risk she’s got there.
About your W2–you’re a waitress–your wage probably is really low. What about your tips? Did you report them to your employer? Are they listed on your W2? Box 7 will show your tip income. Read this: http://robergtaxsolutions.com/2012/02/what-all-those-boxes-on-your-w2-mean/
Check box 7 and see if that makes more sense. If it doesn’t, ask your employer.
@Jodi—-
JODI JODI JODI!!!! Are you still there? The 1098 might be money for you. There’s a college tax credit that goes with that form! Please–do get some help. You don’t want to miss out on that.
Hi Robert–
There are so many questions involved in claiming a dependent. There’s a good chart in the IRS pub 17, here’s a link: http://www.irs.gov/pub/irs-pdf/p17.pdf
You want page 28. (There’s over 200 pages, you’ll never find it unless you know it’s there.)
But here’s some quick and dirty issues for you:
1. What’s the girls mother and father doing? Always an issue.
2. Did she provide over half of her support? At $5700–I’m guessing no–but that’s a fair question.
3. Usually, the income breakdown is $3800 where you couldn’t claim her–but since she’s only 18, she can still be claimed even if she’s not in college this year.
But do check the pub 17 and make sure–there’s lot’s of issues in claiming a dependent.
Now, part 2: You mean where’s the retirment plan on the W2? It should be in box 12, but sometimes I find it in box 14. Here’s some information on that: http://robergtaxsolutions.com/2012/02/what-all-those-boxes-on-your-w2-mean/
*I thought wow that sucks but oook (I know I shouldve been grateful but I was hoping for more)
Id have to locate the w2s from 2011 but I remember looking at it thnkkng how could I have made that little when I know I made $ 60-80 5 days a week I rem looking at fed taxes they took at it was nothing or next to nothing And I rem my friend whonfiled for me saying the fed taxes aren’t right somethings up but she filed anyway. B4 that job I always received about 4 grand with m son. With this job I had my son and my new daughter to file and received 4 for both. I thought wow that wicks but took. I was only at the job for the year of 2011 but it wasn’t much of an income difference than the previous year or atleast wasn’t suppose to b. I know they lied about my income but what do these private business owners havve to gain? Is it to late tonsay something?
What are the chances my friend could b audited for having claimed kids that weren’t hers or related the past 3 years? I mean really Whats the liklihood? Ive learned alot reading these blogs and I understand the Irs is cracking down. I just talkked to her after reading this and she wont b doing it anymore. But she just had her 1st baby and will b filing her. Do u think filing yet another child tho this time its hers, will possibly raise a red flag? Shes received about 1400 the past 3 years. Also one of my former employers didn’t take taxes out on me on my 2011 taxes… or next to nothing. The girl who filed for me said the w2 didn’t look right. Id have to find my returns (I really need to invest in a file cabamnet for gods sake) But it just didn’t seem right when I received the w2 They claimed I made a lot less than I really did. IF they did something fishy what would they have to gain in claiming their servers (restuaraunt) made much less than they really did? They had us hand write in a log book daily our tips. Btw ur free help and relentlessly answering these questions is amazing. God bless ur sweet exhausted soul lol
That’s probably the best course of action, sitting down with someone. I don’t know how the Pell Grant ended up on there, I entered the information off the 1098T and that’s what it spit back to me on the return. I keep detailed records of when I clean houses, simply because without a schedule, it would be impossible to keep it all straight so that will help with determining quarterly, if I’d be considered self employed. The most I made from one employer was $1,300 over the year, but I had nine houses I worked for, so I entered it was household employee wages since it was under the cut off amount of $1,800. I admit, I have no idea what I’m doing so I’ll see if I can find someone reasonable and legit to help!
@ Mrs. Farmer–
by what does the mom have, I mean what proof does she have that the daughter lived with her?
Why would she beg you to claim her and then claim the girl herself? Sounds like you’ve got your work cut out for you. But the school records are a good proof.
Hi Priscilla,
It sounds to me like your mom can’t claim you as a dependent. Do you made over $3800? If yes, then she really can’t claim you. If not, then how would you qualify for a $1500 refund? So, she probably can’t.
Here’s an IRS link that tells you if you can claim a dependent–use it like you’re your mom to figure out if she can claim you: http://www.irs.gov/uac/Who-Can-I-Claim-as-a-Dependent%3F
1.My 18 year old niece stayed with us for 6 months then moved out and got a job and made about 5,200 for that year do i claim her for the 6 months i provided for her or does she file on her own?
2.My wife has a retirement plan were do i find it and were do i enter it on the tax form.
Not sure i understand the question. What does the mom have?….. I had my sister sign a Temp. Guardianship paper and had it notarized. I also have her school records and text messages from her mom begging me to claim her even though she didn’t live with her cause she needs money. It’s pretty pathetic.
Hi Jodi,
Wow, you are juggling to keep things going aren’t you? Let’s break this down a little bit (‘cuz I gotta to make sense.)
Okay–the big thing that jumps out at me is the Pell Grant. Pell Grant is not income if you’re using it for tuition. And it’s not earned income if you’re going after EIC–so that probably doesn’t even belong on your tax return.
Since your husband is in jail–head of household is probably the correct filing status.
Not filing last year is not a problem.
You probably don’t make that much money for an exemption to help. Maybe let your ex claim the exemption and CTC on his kids. Play with the numbers–see what you’re sacrificing.
About your husband–he had income last year. You may be able to file jointly with him for 2011 claiming your child that you have together. You may need permission from the warden (or get power of attorney to sign) but that might help you financially. Now here’s the thing–if he’s in prison for some type of fraud or financial stuff–you might not want to file jointly with him. If he’s basically a stand up kind of guy but he done did stupid–then that’s different. You’re the one who knows him.
Now–the house cleaning–are you a household employee? Or were you self employed? Did your employers withhold taxes on you? You may be liable for self employment tax. Lots of issues there. I’d get some help with your taxes–you’ve got too many things to juggle. You can find free tax help by clicking here: http://irs.treasury.gov/freetaxprep/
And here’s the phone number: 1 800 906-9887
Because you’ve got so many issues, you want to have a set of eyes with some training take a look to make sure you’re okay. Good luck.
Hi Mrs. Farmer,
Well it seem like you have a plausible argument–what does the mom have? That’s going to be your issue. Did the mom live with the child also? If yes, you have a problem, if no–you’re probably good. Here’s a link to the EITC assistant: 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.
I have a situation where I am 24 years old and have lived at home for about 5 months. My mom wants to claim me so I wont see my $1500. Can she do that or will she get in trouble? I,havnt gone to school in two years.
I have a train wreck here. I’m married, but my husband has been in prison the entire year. I also have three children. One turned 18 and moved out on his own in September. The other two I have joint custody of and we alternate weeks between their father and I. Last year I did not file a return, as I was in school full time and essentially lived off of student loans. My ex-husband claimed our two sons on his 2011 return. This year I took evening/online classes and worked at a restaurant and also cleaned houses. After checking the IRS documents, I seemed I could claim the income from house cleaning as Household Employee wages. I have started my return online and it shows my income broke down with the HSH notation beside it, plus another amount which I believe is the balance of my Pell Grant after tuition was paid. I am planning on claiming my son who turned 18 and moved after graduation and one of my other sons. With this information, is there any problem with filing as HOH and claiming EIC for the two qualifying children? Or will the lack of a filed return last year be a problem? My husband was employed in 2011, but was sent to prison in September 2011 and has remained there since and I did not file on his behalf.
Thank you for your time!
I claimed my niece on my taxes because she lived with my husband and myself for 9 months out of the year. What will happen if my sister claims her? Will I be in trouble or her. It’s her daughter. I have proof that she lived with me. What should I do to make sure I will not be in trouble?
Hi Maria,
It sounds like the girlfriend has custody of the daughter. If they live with the sister, it’s possible that the sister could claim the daughter is she’s supporting the ex and the child–but if not–then it’s illegal.
Here’s a link to the EITC website that has all sorts of questionaires to help you figure things out: http://www.irs.gov/Individuals/Earned-Income-Tax-Credit-(EITC)-––Use-the-EITC-Assistant-to-Find-Out-if-You-Should-Claim-it.
If your husband is supporting the child, but not living with her, she should ask the ex to sign an 8332 form so that he can at least claim the exemption and child tax credit. He cannot legally claim EIC if he does not live with the child.
Here’s a post about splitting exemptions: http://robergtaxsolutions.com/2011/11/split-exemption-claiming-one-child-on-two-tax-returns-%E2%80%94-the-legal-way/
Hi David,
So you claimed your wife’s son on your tax return before you were married. It depends–did you get EIC or did you just claim the exemption? It seems to me that you would have been legally entitled to claim the exemption if your wife wasn’t working those years. If she was working, or you claimed EIC–then you shouldn’t have claimed the boy.
Of course, now that you’re married, you should be claiming your stepson.
I would like to really clarify the situation, im sorry for another post 🙂
My husband takes her daughter every wednesday and sunday. and Child custody is still process on the court. He claim his daughter last year. and we gave the ex half of that return. My husband told me that he really doesn’t have the right to claim the daughter since the custody thing is not done yet. But weve been supporting that kid since shes born. (I dont understand why he cant claim her daughter since hes the dad and been paying child support) Now, the mother of the child (ex gf) told us that her sister will claim the daughter. Her and her sister together with her mom lives together plus another friend.She doesnt work and her mom. so that means we are supporting them plus her new baby. (from another man) I just want to understand if we have the right to claim my husband’s daughter?and is it possible for her sister to claim both her kids since she doesnt work? I hope you answer my question. i would really appreciate it. Thank you
Hi
My husband’s ex gf was trying to claim their daughter, But she isn’t working at all, she only depends on the child support weve been giving them each month.and some food stamps.now, the ex gf wants to claim their daughter( she ask her sister to claim their daughter) and i would like to know if its possible she can claim the daughter? i dont think it is right because my husband has been working his butt to support our family plus her daughter on her ex’s.
David,
Are you the biological father? If you aren’t, then you could not claim the children for purposes of getting the earned income tax credit-but only the exemptions. However, the IRS does not know this.
If I were you, I would file amended returns and pay up.
Me and my wife were together for 3 years before we got married i been claiming her son for thos years but now we are married im i in any kind of troble with the irs
Hi Chris and Sami,
You’ve got your work cut out for you. The decree showing that Sami is the primary custodail parent may help a little, but the IRS doesn’t put much stock into them because so many are just plain wrong.
Prepare for battle now. What do you have to prove the kids are with you? Lease? Daycare? A log book? Log book–calendar? I really like the calendar.Example: “kids were with me because of Gramma’s birthday.” “Kids with ex because of Barney show.” See what I mean? Can you account for where your children were for every single night? That would help.
Now, it sounds like the ex isn’t going to be cooperative–that’s too bad because sometimes splitting exemptions is a win/win situation. I know some families that plan it out that way.
The best thing you can do for your case is that when the whole audit process starts, answer the questions and submit the documentation as quickly as possible. I’m sorry, but I think this is going to be ugly for you. Good luck.
Hi Nena,
We were just talking about that in the office today. You’ve got the people who really need the EIC and then you’ve got the folks who are commiting fraud. There’s $14 Billion (yes, that with a B) worth of EIC fraud every year. The government’s running out of money and services to people who really need it are going to get cut because of folks to scam the system. Sorry, I’ll get off my soapbox now.
Anyway, here’s a link that tells you how to report tax fraud. http://robergtaxsolutions.com/2010/11/how-to-report-tax-fraud/
One thing to know–you’ll never know what the IRS does with the information. They won’t tell you because of the confidentiality laws. But you should know that they’ve stiffened up the rules to keep people like that from claiming kids that aren’t theirs. We’ll see if it works, but at least they’re trying.
i forgot she also gets food stamps , i don’t
i know a person who pays illegals for their kids ss number to claim the EIC credit and has being doing this for more then 10 years she claims them as her grand kids foster kids she has not been caught i don’t think its right for her to get all this money
how can i report her i have 3 kids and i know how hard it is to take care of them and i don’t even get child support i work 10 hrs a day at my job and thats why im so gratful for the irs to give me the EIC credit that i do need thxs
We offered him 1 child to claim every year, he declined. We told him there would be an investigation, he replied, “bring em on.” I am pretty sure we have the Higher AGI. Is there any way to expedite the investigation? And what constitutes proof of a 2 year old and a new born infant staying the night?
From Pub 17: “If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year.”
If Sami and Ex claim the same children, both of your returns will be flagged. Being that the days are so close makes things tough. But keep in mind that if Sami and Ex both claim the children, both returns will be flagged and the refund process will be considerably lengthy-approximately 75 days.
If you don’t mind a non liquid tax refund, consider proving yourself in the audit process. Perhaps strike a deal where Sami claims one child and ex claims the other.
My wife Sami and I won a custody case this fall for her two children(Joint Legal/Sami Primary Custodian). The father has notified us that he is claiming the children. We don’t think he is eligible to do so. The 3 year old was with Sami for 183 nights and with the father for 183 nights. The 1 year old was with Sami for 175 nights and the father 173 nights. I understand the IRS will have to investigate who the primary custodian is. Does the court order of Custody ruling in our favor help us out being that it is so close on actual days? And will we be penalized if we go ahead and claim them or should we file only claiming the 1 year old and possibly do an amendment later? The court papers say nothing about who can claim the children.
Hi Krystal,
You’re asking the right questions, that’s smart. Here’s a post that you should read: http://robergtaxsolutions.com/2012/01/can-my-boyfriend-claim-my-child-by-a-different-father-on-his-tax-return-for-the-earned-income-credit/
But here’s something else to know–your boyfriend can’t claim your kids for EIC or the child tax credit, but he can claim them (and you) for a dependency exemption. That’s what the H&R Block lady was saying (I hope.)
So–here’s something else to consider–your ex is behind on the child support, but if he claims one of the children (once again, your ex can’t get EIC either because he doesn’t have custody) but if he claims for the dependency exemption — your ex can qualify for the child tax credit and that’s worth $1,000. So you might want to consider letting him claim your child if it will help you get your child support.
Weigh your options and do what’s best for you and your family. The point is–you do have options. 🙂
Hi Kacey,
While it’s rare for someone to go to jail for claiming their own kids, your friend could still get into trouble. Most likely it will be owing the IRS back the refund money plus penalties and interest. If she really wants to avoid trouble, she should amend her return and take her kids off. That way she’s the one making the change and fixing things, not the IRS going after her.
Hi Jan, I have a question for you. My fiance and I have lived together since november 2011, thats when we bought a house together. My fiance is the only one that works, I go to school. I have 2 children that live with us, there biological father pays child support. In our court agreement he is able to claim one child and i am unless he is behind on child support. Well he is behind and since I am not working I will not be filing taxes. My fiance called HR BLOCK to see if he could claim my children, they told him he could claim me and my children. But from what I am reading here I feel like it would be fraud if he did. He made 38,000 so I dont think he would be able to get EIC. But would claiming them be fraud or does he have a right since I wasn’t working and I am not filing.
I have a question a friend of mine claimed her kids that were in foster care at the timeknowing that she shouldnt of.can she go to prision for this
Hey Lashawn,
I don’t understand, how is your cousin claiming your child for five years without you knowing about it? Are you not claiming your child? I guess I’m missing something here.
Anyway, I guess it doesn’t really matter. The best way to stop someone from claiming your child is to claim your child yourself. It will throw the return into an audit–you too, but that’s how the whole thing gets sorted out.
You cannot file as head of household if you and your husband live together–that’s tax fraud and you’d get yourself into trouble with the IRS instead of your cousin.
Either you file jointly with your husband, or you file married filing separate–now if you file married filing separate-there’s no EIC–but you haven’t claimed your child for 5 years so I’m guessing EIC isn’t something you’re looking for anyway.
You may go back three years and amend returns to claim your child.
Hi Key,
Here’s my post about how to report tax fraud: http://robergtaxsolutions.com/2010/11/how-to-report-tax-fraud/
That should give you the directions on how to do that.
About claiming your kid’s exemptions–If you file your return as married filing separate, and claim the exemptions for your children–just the exemptions and child tax credit–here are the possible outcomes:
1. you ex was lying and nobody else claimed the kids and everything will be fine
2. your ex wasn’t lying and she let a cousing claim them–two possible outcomes there:
a. the IRS takes away the cousin’s claim because it’s illegal and you get to keep the refund, or
b. the IRS takes away the cousin’s claim but doesn’t let you have the refund either
So, you might want to claim your kids–recognize that you might not get anything for it–but that you will mess up the cousin. But there’s a risk there because your wife isn’t going to sign the 8332 for you, so the IRS could deny you getting the refund. The worst case here I think would be for you to get the refund and for your wife to file a complaint and the IRS ask for the money back plus penalty and interest.
Do not try to claim EIC–that you’ll lose and you don’t have a good argument. You do have a chance at winning if you claim just the exemption and the child tax credit. It’s still risky–but I think you’ve got “reasonable cause” and if you did lose, you could probably have the penalties abated.
Good luck.
Now, if you decide to make a donation–I can’t accept a donation to me, but I have a charity that I volunteer for. It’s called Slaying Dragons, they try to help people learn about mental health issues by putting on shows. They just did a new show about Alzheimer’s today. They’ve been running a show about depression. Here’s a link to their “How You Can Help” page, it has a donate now button. Thank you for your kindness.
also if shesbluffing and i do claim my kids since i paid her in cash all year can she get me in trouble with the irs? if she is not bluffing and i claim my kids as well as whoever she let claim them what are the consequences for me and the other person?
My cousin has been claming my son for years on her taxes witouut me knowing a total of five What should i do or where do i go To get it stopped will she go To jail i dont no y h& r block would let her claim a kid with no birth record or ss card also can i file head of if my husdanb and i live together on and off more off than on
im currently workimng on the custody issue. thats a very sore subject tho. thank u for ur geniune concern tho. that makes feel ur good at ur job as well a righteous person. God bless u
i am a complete idiowhen it comes to taxes and such so ne detailed as possible and if i do get some money back i would be more then happy to vmake a “donation” to ur firm. u really should be compensated for ur free legal advice
so i spoke to her and apparently she already had someone file at h&r block. she didnt tell me who it was but im going to file tax fraud. can u explain the details of how i go about this. and since they are already going to get the return do i have any chance of recouping the lost money?
Hi Rosie,
Rosie, I deleted your post. I think you’re in big trouble and we wouldn’t want the IRS or Immigration to be scanning my website to find people.
I would hightail it to a tax attorney. Here’s the thing–you’ve got a tax fraud issue going. There’s a fine line between “tax fraud” and “criminal fraud”. As an enrolled agent, I have “privilege” which means that I can’t tell on my clients by law. That privilege is gone if the case turns criminal. If you came to my office in person, I’d refer you to a tax attorney–attorneys have privilege even in criminal cases.
What’s happened is you’ve managed to “cross the line” in several areas. First, claiming head of household when you’re married is a big no-no in the eyes of the IRS. Now I’m guessing that you received EIC, and you can’t receive EIC if you or your husband doesn’t have a social security number–so that your second strike.
Now, it’s perfectly legal for your husband to claim his children in Mexico for the child tax credit–but you filed head of household without him so you can’t claim his kids. Ouch.
And the whole ITIN issue for kids in Mexico is a major hot potato. You didn’t say where you live, but the case in Indiana forced the IRS go make some changes nationally–if you’re in Indiana though, you’ll have even more trouble than if you’re in another part of the country because of the media attention.
You should also see an immigration attorney. You’ve got problems here that are out of my league. Sorry.
Hi Key,
I think you know this already but I’m going to say it anyway: it’s against the law to “sell” your kids exemptions to people. Meaning, a cousin has no legal right to claiming the children.
Now, you’re still married and your wife has no income. It makes a whole lot of sense for her to file jointly with you and have you claim the children on your tax return. You might not want to file jointly with her though–she sounds like she could have other financial problems that you don’t know about.
Therefore, she should sign the form 8332 and have you file as married filing separately and let you claim the exemptions and child tax credit.
Now, I don’t like to be nasty but sometimes you just gotta put up a fight–I think you’ve got a card to play here. Either she signs the 8332 or you will file an official “fraud” report that someone who isn’t related to your children is claiming them on their taxes. Oh–here’s the form http://www.irs.gov/pub/irs-pdf/f3949a.pdf
Now this isn’t a tax question, but I think it’s relevant to your situation. If your wife is as bad as you say she is, why does she have custody of your children? You’ve got a bigger issue here than your tax return.
Hi Tee,
Do I understand this correctly? You and your husband live with your stepkids, right? And the divorce decree gives the exwife the right to claim the stepkids on her taxes, right?
Here’s the thing–the kids live with you so you and your husband are entitled to EIC (if your income qualifies) but the ex gets the exemption and child tax credit. Here’s a post explaining it: http://robergtaxsolutions.com/2011/11/split-exemption-claiming-one-child-on-two-tax-returns-%E2%80%94-the-legal-way/
Hi Rob,
You’re on the wrong page. You haven’t commited fraud. Breathe. There, feel better?
You claimed 3 exemptions on your W4 form–that just means that your employer didn’t withhold as much as you should have withheld. Yes, it’s your own fault, but it’s not a crime or anything like that. Lots of people have done that.
So what’s going to happen? Well, I’m with your girlfriend–you’ll probably owe on your taxes this year. And I’m also with your Mom–it was a mistake–although you’ll probably owe, you won’t be hit with any penalties or things like that. (You’re hanging with some smart women–you must be really cool!)
So, what you want to do if prepare you taxes and figure out just how much you do owe. It’s possible that you don’t owe anything although I doubt it. Basically, the more money you make, the more you’ll wind up owing. If your income was fairly low, it will only be a few hundred dollars at most. If you made a lot of money–well then you’ll owe much more.
So figure your taxes now and know how much you’ll owe. If you can save up enough to pay by April 15th that’s perfect. If you really owe way too much to pay, then you can set up an installment agreement. But try to pay it all now and get it over with.
Also, you’ll want to go to your employer and change your withholding so you don’t have this problem again. Good luck.
Hi Kris,
Since the child lives with the grandfather, then technically the grandfather has the right to claim the child for everything. If the ex was working and claiming the child, she could release the exemption to your husband so that he could have the exemption and the child tax credit–but he’s not claiming the child at all so she can’t release the exemption.
Sorry.
and there has been legalities as far s seperatio or divorce if that helps
now that i think about its actually her cousin she just called him her brother because they grew up in the same house. anyway blood pressure high and about to have a stroke. thanks
my wife and i owned a house and had three kids. we had a falling out in january and i left. i took care of them all by giving her money(cash) to pay all the bills and expenses. in may we sold our house and split the mo8ney 50/50. we agreed verbally that we would get an a place in the same city and then would have the kids live between us. well when she got her half she did not stick to that and moved out of state with another man. since then i have added money to her bank account multiple times(again with cash and yes i now realize how stupid that was). anyway she ran out of money and got evicted in the middle of december and moved in with her out of state(this is 3 different states now) brother. we made an arrangement that i would claim them and split it it 50/50 with her and she agreed but last week i found out she is 5 months pregnant and the father found out its a good chance he is not actually the father and obviously left her. now she is saying i cant “use” my kids for a tax return and she is going to let others(most likely her brother claim them) and if i claim them she is going to get me in trouble because i always gave her cash and i vant prove i supported them.is there any truth to this? also she cant claim them because she hasnt worked so shes going to use someone else. how should i handle my taxes? please answer asap as i have been manipulated enough. thank u