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
Hi Jared,
Here’s the rules for a common law marriage in Texas: A man and woman who want to establish a common-law marriage must sign a form provided by the county clerk. In addition, they must (1) agree to be married, (2) cohabit, and (3) represent to others that they are married.
I suspect that you could just provide the IRS with your form that the county clerk form that’s dated in 2013 or before.
Hi Megan,
I’m going to go out on a limb and guess that you meet all the other criteria for claiming your brother except for 1–and that’s the support issue.
I realize that you “support” him by sending him money, but when the IRS says support, they mean that you’re paying for more than half the cost of putting a roof over someone’s head and food on the table.
There’s a recent article in the New York Times that says the cost of keeping a prisoner is about $168,000 a year. Yowza! That’s a while lot of money. Even if your brother is in a cheap prison–the cost of keeping him there is going to be really high, so you’re just not going to meet the support test.
I’m guessing that you’ll get a letter stating that they think you should remove your brother from your return and your refund or balance due will be adjusted to whatever it should be without him on there. You’ll be asked to sign a paper stating that you accept the changes (because you should, I don’t think you can win this one) and pay the tax (if you owe anything.)
Lucky for you, they stopped this before sending you the money! Usually these things get caught after you’ve gotten the refund, spent it, and then because it’s after the filing deadline there’s fines and penalties on top of the tax owed. So as bad as it is to get that letter, you are really lucky they caught it now instead of later. And they would have caught it later because they have access to prisoner social security numbers and that does get screened.
Hello.. my cousin recently filed his taxes but he put a dependant that wasnt his and he recieved a few dollars over 5000 but the irs has sent him a letter. Notifying him basicly that they know. What type of charges will he be facing?
i don’t work so I let my boyfriend claim my 2 kids and he filed them under step children because that’s what they told us to do we have been living together for the past 2 years and he provides everything for my kids my kids are still little so they don’t go to school and we have a home but like the guy before me it was given to me by my grandparents and we just pay them rent and the light because its all in one because we live in the country so my question is how can we prove my children and him lived in the same home
AND I HAVENO BILLS IN MY NAME CUZ ITS ALL LINKED INTO ONE CUZ OF THE COUNTRY
I have a question my fiancé doesn’t work and is hardly around and ive been taking care of her 2 kids they are just like mine they have lived with me for about a year and a half I provide all their needs as in diapers clothes food shelter my son is only 3 and my daughter is 1 I claimed them on my tax return and no one else did and I put them AS my step children because me and my fiancé are common law which goes in texas but now I cant provide proof that they lived with me for 1. they don’t go to school and family members watch them 2 we have no lease because our home was givin to us. so what do I do I don’t want to get in trouble
My return was selected for review. My brother has been in prison and Ive been supporting him sending him money etc. I claimed him on my taxes. What will happen next? I am unsure. Will they just tell me to correct my taxes or will they just correct it themselves? Will I have to file an amended return. Just unsure what will happen. I looked up if I could claim him and I get mixed answers.
Thank you so much I am going to H and R tonight to amend so I will just do that. I have had to do this before. Because of my ex for the first 3 years we were split up. But I always felt that maybe had I went to the irs in person then I would’ve had better luck. However I am taking your advice. I am very level headed, but my husband is a different story. LOL. And I definitely don’t need him to cause a scene. Again thank you so very much!
Hi Laura,
First job is to make sure you’re in the right. I realize it seems obvious, but for some moronic reason, the IRS doesn’t take into account things like molestation. They only take into account how many months the children lived with a parent. Were the kids with you for more than 6 months? I hope so, then you’ve got the winning case.
Now, I strongly urge you to not go to the IRS office in person to put a stop to it. You’re being logical. Clearly once they hear your story they’ll fix it, right? Quit being logical! You’re dealing with the IRS!
I think your best bet is to paper file your tax return. That will start the audit process. It will take time, and you’ll have to fill out paperwork proving that you’ve got the kids etc. It seems to me you’ve got pretty good proof and will win your case easily.
But I don’t think you’ll have much luck going to the IRS in person. Then again, you’re probably more patient and understanding than I am. I get a little frustrated and um….mouthy? It doesn’t always go so well.
So if you can control yourself really well, you might try going to the local office, but don’t have high expectations of anything getting completed quickly. The whole process will still take several weeks to settle. But you might cut some of the time by going in person. Just keep your expectations in check (because I don’t have high hopes of you getting anything resolved quickly.)
Good luck.
I just filed with H and R Block. I have two children. For the past two years my ex had the children living with him. So he claimed the EIC on them. Now the children are back with me and for good. I have sole custody of them. Well today H and R called me informing me that someone has already claimed my daughter. I know it not my ex as he is in jail for sex battery and molestation. And the only other person that has access to his records is his mom. Now I have been reading thru a lot of these comments and your responses. So it is safe to say the once I go to the local IRS building tomorrow and fill them in on what’s been going on that they will put a stop to it? Right? I mean she is a paralegal I would think she would know better than to do this. And I have had the kids since the beginning of May. And she has never had them at all! Sorry to get so detailed. Its just that this is all so frustrating!! Thank you!
Hi Brandy,
it sounds like your brother is okay claiming your children. You have no income, the father doesn’t claim them, and your brother really does live with you. The utility bills are in his name and the address is on the bills–that sounds like pretty good proof to me. You can prove he’s your brother, and I’m assuming that you can prove the kids live with you. Looks good to me.
Hi Frank,
First, you said that 2013 will be the last year you claim anyone’s kid on your taxes unless they are biologically yours. Let’s change that to 2012. Even if you’ve already filed, you still have time to go back and amend 2013 and repay that refund.
Or at least, when you get that refund, don’t spend it, stick it in the bank and be prepared to give it back because I believe that you’ve been caught.
The “review” I’m pretty much guessing is about EIC. Why–because you think it’s about EIC. If you had suspected you’re being reviewed about anything else you’d be asking about that, right?
And, quite frankly, let’s say your review was about something else–you mentioned you had self employment income, those reviews tend to spill over and the EIC will wind up being revealed even if that wasn’t what the review is about.
So, let’s assume the review is about EIC, and they determine that you don’t live with the child and you’re not the biological father–so you lose the EIC, the head of household tax designation, and the child tax credit. The IRS is going to want that money back.
You have no job–you can probably get placed on the “currently uncollectable” status. That will bide you some time while you’re out of work. Once you start working again, then they’ll expect to be paid. I’m thinking you’re going to want to do an offer in compromise to try to reduce that debt.
Your girlfriend will be able to file back taxes for a few years claiming the child. Hopefully, she’ll get some money out of the deal and help you financially. That said, you don’t know if she’s the one who turned you in or not. (I would certainly hope she didn’t.)
Will you go to jail? It’s doubtful. Generally, the treasury agents don’t go after people for less than $40,000 in a given tax year. Although you may owe the IRS over $40,000, it will be for a number of tax years, not just one. Your issue will be figuring out how to pay, not prison.
Good luck with your case.
My brother has been living with me for the past year to help with bills and the financial support of my children while I finish my college degree (I am not working at all, just attending school). He is not on my lease but does have bills in his name here where he has been living with me. I allowed him to claim his nieces and nephew because he has been our support other then $60.00 a month in child support I receive. The children’s father cannot claim them so there should be no issue there. However we received a notice that his return was pulled for review and that we would be receiving a letter within 30 days requesting more information. What type of information do they usually need to prove eligibility. I can prove their relationship and that the children live here, that I’ve had no income and am in school and I have some proof that my brother lives here but nothing concrete since he isn’t on my lease. I was sure he had a legal right to claim them since he supported them and they’re related to him. Did he have a legal right to claim them? And if so, what type of “additional information” are they likely to ask him for to satisfy the inquiry?
I’ve been reading all these reader responses, and I just want to clarify about my own situation. Over the last few years, my girlfriend has let me claim her youngest son on my taxes. At the time – in 2007 – I wondered if it was legal. She said that since she had 3 sons in all, that she could only claim the two older ones, so why not I claim the youngest.
I do provide for his physical well-being, provide clothing, food etc. for him. The thing is do not live in the same place he does (with his mother) on a full-time basis.
I’ve been doing this the past few years with no problem. Recently I got a message on my the IRS refund tracking site that my return is under review. According to them I should be getting a letter in the mail requesting additional information – about what I don’t know. I’m wondering though if it’s about the EIC.
If it is – I would just claim guilty. In all honesty, I was never sure if claiming another person’s child on your taxes was legal or not. I know many people do it (claiming numerous children on their taxes no less).
With this said, what’s the worst that could happen to me? Fines? Would I have to pay back the EIC with penalties? Also, presently I am mostly unemployed (on a part-time basis, I provide tutorial services to kids as a self-employed 1099), and if hit with penalties I would be unable to pay much of anything until I find another full-time job – so in that event what would the IRS do?
None of this has actually happened, but I am wondering in the event that this “review” is indeed about the EIC. Right now I am panicking wondering what’s going to happen. Whatever the outcome I know 2013 will be the LAST year I claim anyone’s kid on my taxes unless they are biologically mine.
I’ve been reading all these reader responses, and I just want to clarify about my own situation. Over the last few years, my girlfriend has let me claim her youngest son on my taxes. At the time – in 2007 – I wondered if it was legal. She said that since she had 3 sons in all, that she could only claim the two older ones, so why not I claim the youngest.
I do provide for his physical well-being, provide clothing, food etc. for him. The thing is do not live in the same place he does (with his mother) on a full-time basis.
I’ve been doing this the past few years with no problem. Recently I got a message on my the IRS refund tracking site that my return is under review. According to them I should be getting a letter in the mail requesting additional information – about what I don’t know. I’m wondering though if its about the EIC.
If it is – I would just claim guilty. In all honesty, I was never sure if claiming another person’s child on your taxes was legal or not. I know many people do it (claiming numerous children on their taxes no less).
With this said, what’s the worst that could happen to me? Fines? Would I have to pay back the EIC with penalties? Also, presently I am mostly unemployed (on a part-time basis, I provide tutorial services to kids as a self-employed 1099), and if hit with penalties I would be unable to pay much of anything until I find another full-time job – so in that event what would the IRS do?
None of this has actually happened, but I am wondering in the event that this “review” is indeed about the EIC. Right now I am panicking wondering what’s going to happen. Whatever the outcome I know 2013 will be the LAST year I claim anyone’s kid on my taxes unless they are biologically mine.
Hi Marie,
The IRS is trying to catch up. They tell me they will (not your ex specifically, but your type of case in general) but who knows for sure. The Treasury Agents (IRS dudes with guns) don’t go after anyone with less than $40,000 in debt. EIC fraud is less than that, unless you add the years together, with they don’t. So. supposedly he’ll get caught, but when I don’t know.
That said, the IRS is doing all sorts of things to keep the money from getting into the wrong hands. We’ll see how that works out. You might notice that your preparer will ask you for a copy of your daughter’s report card from school or her medical records. That’s a new rule– the IRS is making tax preparers get evidence that a child lives with someone. The penalty for not getting documentation is $500 a return. So, maybe there will be less fraud this year. Let’s hope so anyway. Good luck.
Question? My husband and I claimed my daughter last year. It was kicked back because of her father claiming her before we did. Long story short the irs sided with us. It took some time but we did get our full return back. My question is her father also received a return for her. I spoke to him and let him know what was going on. He says he still has not been notified from the irs that he was in the wrong or any thing. Is this going to happen again this year when I claim her? Is the irs ever going to catch up to him?
Hi Lamont,
It’s a little scary what your girlfriend did. Generally, people won’t see jail time for tax fraud if the amount is under $40,000–that’s sort of the baseline where the treasury agents (the guys with the badges and guns) get involved.
That said, she can still get caught and still be required to pay the money back. And the price tag can be pretty hefty. Also, she can get in trouble for welfare fraud too.
If you’re thinking of marrying her, you’re going to want to make sure she straightens out her taxes first–otherwise you could wind up paying her penalties and that’s not fair.
I have a girl friend that’s on welfare and she did a fake tax refund and got back $7500. she hid it from me but I was home and got the refund. she told her friend and her friend boyfriend told me how much and that she was hiding it from me. I was like you go end up going to jail. she did not work and is on welfare. will they catch her and what could be the penalty. I didnt want none of the money cause that’s on her to pay it back.
Hi Sam,
My first question is: did they live with you? This is important because if they did–well then if I were you, I’d fight.
Now, if they didn’t live with you–you can’t prove it, then you’re going to owe. Taxes, penalties, the whole bit.
Now–if the IRS is right, you don’t need to amend since they basically re-did your taxes for you. UNLESS–and this is the big part, you don’t need to amend unless there’s something else you can do or claim that would help your tax situation.
Now, you have one other problem. The IRS office is pretty much closed. The people who collect money are supposed to be working, but getting through to someone who can help you could be a bit of a problem. If you can’t get through on the phone at the number they gave you, send a letter saying that you tried to reach them and want to resolve your account. At least you’ll have covered your behind on that point.
If you owe a bunch of money, you might need to set up an installment agreement so you don’t pay it all at once. Good luck.
Hi maybe you can help me? I claimed my half bro and sis. I got audited cant prove they lived with me all other proof i sent in. Now they want me to pay bunch money plus penalties if i dont respond with a good answer by tom. Is it too late to make an amendment? what are my options?
Hi Jen,
I’m hearing you. It’s really frustrating when the people who are supposed to help you treat you like a criminal. And let’s face it, if you’re qualifying for EIC, you’re not made out of money! I would suggest you hire someone to help you–but that’s not always easy when you’re trying to put food on the table.
But, this might be the time to take the plunge. Especially if three years have passed. If you wait too long, you could lose out on the refunds you’ve got coming.
Here are my best tips:
1. Find somebody local. You want a face to face kind of person that you can talk to. You can go to this website and plug in your zipcode, it will find an Enrolled Agent close to you: https://portal.naeacentral.org/webportal/buyersguide/professionalsearch.aspx
2. It sounds to me like the IRS did not accept your custody paperwork as proof that your kids live with you. They generally don’t accept that. Lot’s of people’s paperwork says the kids live with them, when the children really live elsewhere. What the IRS is going to want from you is school records, or medical records. Maybe daycare paperwork. Something that shows your children really do live with you.
I know, you’d think a legal court document would hold sway–but in this case it doesn’t. Go figure.
3. Your biggest problem is that somehow you got tagged with the “cannot claim EIC”. That is going to be a mound of paperwork to fight. The thing is–you’re going to need somebody who can help you wade through it. In all fairness, you’re going to be the best person for the job, but I think you need some help. For what it’s worth, I’m in St. Louis. I’d be willing to help you.
My child’s estranged father claims him every year. He e-files before me and every year my efile is rejected. I had called the IRS to let them know and they told me that they wouldn’t be able to do anything about it until they ‘caught’ it themselves. It took three years and I was finally audited. The IRS is impossible to work with. I have called and sat on hold for literally hours every single time. All the workers tell me something different. I have been mailed forms to fill out and when I call to confirm that I am completing them correctly only to be told that these are forms that haven’t been in use for years. After being fed up with trying to battle everything on the phone I went to my local IRS building only to be ‘bullied’ by the woman there. She bluntly told me I owed over $7000 and I was required to set up payment before I left her desk. It was only when I insisted that she call someone else that she discovered that I could open my case up for review. I left their frustrated with a system that NOBODY, not even the people who ran it, could make sense of. I took all of my paperwork, letters, and filings to an accountant who told me to do everything that I had already done on my own AGAIN. It is now 2013. I have been fighting this for 3 years. The IRS owes me over $10,000 and growing. I have been banned from claiming the EITC since my custody papers stating that I was the sole residential and legal custodial parent weren’t sufficient in proving that my child lives with me.
I am severly tired of attempting to find help and instead find people who are in a position to not care or take any kind of responsibility for the establishment in which they work.
Hi exphx,
I’m sorry, I’ve got a backlog and I can’t seem to find your earlier question.
I sent you a question but I don’t see if you ever commented on it. thanks!
Hi Tamara,
So your husband hasn’t filed taxes in 6 years and now he needs to file in order to apply for his green card? You had filed as head of household.
I would not want to refile as married filing jointly. I think he may be better off filing as married filing separately.
Were you living together? If yes, then that’s a problem, but if you were not living together for those six years then you’re good.
Now if you were living together, your options would be that you file as married filing jointly, or you both file as married filing separately–either one of those would have you losing your EIC. Ouch.
Now, if you’re only losing the EIC because he has an ITIN, if he can get a social security number out of this, then you can refile and at least reclaim your refunds the the past three years.
If you have to put your husband on the return, and you have 6 years of EIC, that’s going to be a lot of money. You may need to consider an offer in compromise or some sort of payment agreement, that way too much money for someone who’s “just making it”.
Sorry, I wish I had better advice for you. It seems to me like you’re stuck between a rock and a hard place. Good luck.
Hi Kelly,
I’m sorry about your dad. Sounds complicated. Here’s the tax rules:
The person who claims the dependency exemption, claims the college tax credit.
So–can he claim you? It sounds like yes he can, you say it’s in the paperwork. I’m guessing that the divorce was before 2009, but just in case, here’s a link that might help: http://robergtaxsolutions.com/2012/01/court-ordered-exemptions-and-the-irs/
Here’s the really nasty part: it doesn’t matter that he didn’t pay for your college, the credit goes to him anyway. (Yes that rule stinks, especially for people like you.)
The upside is that you’re 23! Most divorce support decrees end at 18, the rest at 21. Yours has to end soon. By most accounts, he shouldn’t be able to claim you next year.
That said, maybe he’s just paying but not able to claim you. I think you could fight this. The divorce decree says no payments after 21. It might be worth filing an amended return claiming yourself and claiming the credit. By doing it as an amended return, the worst that could happen is the IRS could say No. But that would be it, you wouldn’t get into any trouble for claiming something you couldn’t, you’d just get a “no.” I think it’s worth a try.
Hi Willie,
If you lived in your home and supported your children, you should be able to claim them. Your wife cannot let other people claim your kids. That’s tax fraud. You have rights.
I recommend paper filing your tax return.
Oh Martha,
He shouldn’t have claimed them as his neices–that sort of implies that he lied about the EIC. Well, fix it and pay up. That’s the best advice I can give. Sorry.
Hi Martha,
Your fiance’ claimed your neices with your sister’s approval. So here’s my question: did he claim EIC? If he claimed EIC then he’s ihas a problem because he has no legal claim to the girls.
Now, if he only claimed the girls as dependents, and no one else can claim them–meaning your sister has no income–then your sister could write a letter for him.
Even if he did claim EIC–he might still want to have your sister write the letter so that he can keep the dependency exemption even though he’ll still lose the EIC.
my husband has not done his taxes in 6 years, Now that we want to start his immigration process we were told I HAVE to go back and redo all our taxes. So i have filed head of household for all this time claiming our kids and recieving EIC. Now that i have to ammend them what is going to happen. he does not have a social only a itin. I need some good advice. So terrified and the deadline is coming up soon. Will I have to pay back all the eic even if we were under the guidlines and I’m the money maker of the house. Should I go speak to them face to face? I don’t know what to do and I don’t want to be in more doodoo than I have to. Have 4 kids and barely making it but we’re making it
also! i forgot to mention, he was only supposed to pay my child support until i turned 21, and then he was supposed to stop, and then would not be able to claim me at all, and then id be able to claim myself… he has continued to pay the support, we have no idea why, and it has further given him the ability to then claim me still on his returns… should we call the IRS? i have no idea what to do!
thanks again!
Hi! I am 23 and just finished college, my parents are divorced, but in the paperwork, it says my dad can claim me on his taxes. So last year I claimed myself, (not knowing he was claiming me all these years) and I was supposed to get back 1,000 from my college (which I pay for). He ended up getting that money, and might possibly get it again this year.
My question is, how can he get that money if he doesn’t pay for my college at all? He pays $17 a day for me for child support, which barely covers food and travel to get to school each day! Is there any way I can get my money, and stop him from taking it? Also, we are estranged, as he has caused me so many problems in my life (causes extreme problems for my mother, and uses me and doesn’t care if i get hurt in the process) We tried contacting him last year about this matter and he ignored us.
Can we get him audited? Will I get anything back? I just don’t see how he can legally claim this on his taxes when he doesn’t actually pay for it.
Thanks!
sorry again I meant Dec.26,2012
I lived in the home until Dec.26,2013 and my wife doesn’t work. she then let some people claim the kids so that she could get the money. I was the one working and getting the taxes taking out of my checks.
also he claimed em as his nieces is that bad ??? please help
by the way she was laid of in the beginning of January so she didn’t work all year
hi so my fiancé claimed my nieces on his taxes this year with the approval of my sister of course im guessing he got audited because he got a letter saying they need proof such as school records and doctors letter but the thing here is that he wasn’t on their school record because he was always working we lived with my sister so we have the rental agreement ,, I was wondering if my sister can do a letter and have it notarized or is there something we can do because he did financially support them at the time because my sister was laid off.
Hi Tax Idiot,
I hate calling you an idiot, that’s a bit harsh. Anyway, Things are going so well for you.
You won’t be able to claim head of household at all. Here’s a link to the IRS website that has a questionaire to show if you can be head of household or not.
http://apps.irs.gov/app/ita/app/investigate.action?screenId=s2%40TLC_FilingStatus_Development_Screens_FSLanding_xint&ts=1363920668177&ita=Filing_Status&factId=Filing_Status&entity=global&screenEntityInstanceName=global&itascreenid=What+is+My+Filing+Status%3F-s2%40TLC_FilingStatus_Development_Screens_FSLanding_xint&screenEntity=global&entityInstanceName=global
Okay, that’s a realy long screen name.
Anyway, the boys are not related to you in any way. So you won’t be able to claim head of household. If the boys lived with you for the entire year, you might be able to claim them as dependents–but not head of household.
Now–why didn’t the mother claim them? If she made no money, you probably should have claimed her as well. But if she made money–then she should have claimed the boys herself.
So–maybe you can still claim the boys–but losing the EIC is big. I think your best bet is to call the IRS–explain the situation–and that you know you need to fix it–and see what they want you to do. Generally, you don’t “amend” a return that’s already being processed. But you know your return needs changing and working with the IRS to close the case as quickly as possible is in both your best interests.
Good luck.
Hi Rick,
Your wife is the reason the IRS is holding up some people’s refunds for 75 days. Your wife and people like her. They do the same crap every year.
So–no the IRS is taking those returns and holding them until people like you–the ones who are supposed to claim the children, have time to file their returns and the IRS is going to sorth things out before they mail out those refunds.
Is this a perfect solution? No–I wanted them to issue PIN numbers. But–it’s better than nothing. Anyway, that’s what they’re trying this year. We’ll see if it works or not. But technically, your wife’s refund should be help up–if it’s working right. (No guarantees, it’s the IRS.)
Hi Willie,
So the children are your step children–so that’s a legitimate relationship. You lived in the house for over 6 months. That’s important.
But, she lived with the kids longer, right? So she’s got the right to claim them.
But–you say she’s letting other people claim the kids–that is fraud. So, you’ve got a good case, but make sure you get your ducks in a row and be prepared to have to prove your case.
Here’s a link to the EIC home page: http://www.irs.gov/Individuals/EITC-Home-Page–It’s-easier-than-ever-to-find-out-if-you-qualify-for-EITC
This is where I think you might have a problem:
1. you say “your wife”. Are you still married? If yes, then you can either file as married filing jointly or married filing separately. You won’t be filing jointly–at least I’m pretty sure you won’t.
You can’t file as separately and get EIC. No EIC for MFS.
The other option would be to file as head of household. You can only file as head of household if you lived apart of the last 6 months of the year, AND you had custody of the children. Since they’re your step children, I’m guessing that you don’t have custody–and that’s where you’re going to lose.
Now, if you’re not claiming EIC–there’s no problem with you claiming the kids for the exemptions and the child tax credit when your married filing separately. And that might be what you want to do–it will at least highlight that there’s fraud going on with other people claiming those kids and you’ll still benefit financially–you just can’t get EIC.
Hi Robin,
I guess the biological father that the child lives with will need to file a paper tax return and mail it in. Then the IRS will have to process it and then give the tax refund to the rightful dad (let me guess, his name is Robin?) And the absentee mother and her new husband will get stuck having to pay back the money.
Hi Shaan,
You’re near the upper income limit for EIC, the maximum income limit for EIC with one child is $36,920. Just be aware that the EIC amount you’ll qualify for is very small.
Now–you, your wife and your child all have social security numbers–that’s important because you can’t get EIC without them.
You’re so close–but you’ve got one big problem–you were a non-resident alien for part of the year. You didn’t come to the US until March–so you don’t qualify for EIC. Now if you stay here and your income doesn’t increase–then you’d qualify. But not this year. Sorry.
My problem is I added my friend’s two children as nephew. I get the review/audit letter to show proof of EIC, dependency & Head of Household.
I should have clicked “other” in TurboTax :/ I just felt that my friend has been there for me since age 10 and I consider her family. I guess this isn’t a legal relationship or valid test, but that is reason I selected “nephews”. The kids actually stayed with me, but I do not have their mail coming to the house (goes to grandma’s house).
How can I get out of this mess? I was awarded a small portion of my refund until I verify the other parts. I don’t think I will come up with paperwork that will support this, since I can only prove by Lease with Occupants listed and written letter from my friend that they lived with me & supported by me.
Can I just tell them I selected the wrong option in TurboTax? I feel guilty since I did see “Other”. Can I amend my return in a way where they are removed? …should i add my friend to my return? ~ Or can I successfully reduce the EIC by telling them it was error on my behalf while still get Head of Household?
Please help. ~Great writeup & very informative! THANKS!
Hello Jan,
I have read similar situations as mine in the previous questions. My ordeal goes like this; my ex and I have joint custody of our son. In the court stipulation it says that we do odd even split on claiming him. Every year since he was born she claims him for the years that are suppose to be my years. I have to paper file and send all of the court doc.’s and so on… My question is can she be criminally punished for habitually trying to commit fraud? She knowingly does it this, so she shouldn’t be able to say it was a mistake for the forth time. Right? I know she has to pay the penalties and interest, because she is very unpleasant for a few months afterwords. I don’t want her to go to jail, I just want her to follow the court stipulation as agreed upon. Thank you in advance!
I’m sorry i meant lived in the home for over the six month period.
I left my wife when i found out she was cheating, she let a couple of people claim my step children. I claimed them last year and was planning to claim them again. My tax preparer already put in the paper work. Is my wife liable for the fraud committed? I did leave in the home for over the six month period and the other people didn’t even live there.
What if the Mother of the child who has not had her child for 3 years and his step-father claimed them to get the earned income credit, and did it before the qualifying parent (the biological father) had a chance to file his taxes and claim the child he has had for 3 years??
I moved to Atlanta, Georgia, US on 05th March 2012 with spouse. I am on L1A Visa & My wife has L2 Visa. Both of us have SSN Numbers. I am working for a software firm & My spouse is not working. We blessed with a baby boy on 07/29/2012 & he has SSN. My wife went for vacation with child on 09th Oct 2012 & returned on 31st Jan 2013. Average Gross Income is less than 35000USD.
We are filing “Married filing jointly” & I would like to know if I can claim EIC for 2012. Please help.
Hi Shaun,
So you’re playing the waiting game. You will probably be asked to prove that you are the person who should claim you child. Here’s a link to the IRS website about qualifying children: http://www.irs.gov/Individuals/Qualifying-Child-Rules
I’m guessing the issue is EIC–so I sent you to the EIC page. The top issue is where does your child spend the most time? If you are not the parent your child lives with, then you cannot claim EIC. If you are the custodial parent, then you’ll win.
Your job is to get your ducks in a row and be able to prove your case.