Multiple people claiming same child on taxes.

[MorgansDaddy]

My younger sister came to me asking about her tax situation. Her son goes back and forth between her and his grandmother on the father's side. She has struggled a bit so they have basically helped her out. Well being the time between both were around equal, she thought it okay to claim the child tax credit for him on her tax return. Problem is his grandmother later did the same. Somehow they get state insurance and food stamps with him listed as living there so thus "proof" he "lives" with them.(the grandmother is under audit since my sister has already filed and received a refund and was told she had to prove he has lived with her for more than half the year and is telling my sister the assistance she gets is proof according to the IRS) I am not sure how they could get public assistance without any custody orders and the father has never signed the birth certificate and paternity has not ever been established. My nephew's father lives with his mother(the grandmother) and they talked my sister into not filing to establish paternity and child support in exchange the grandmother help instead of the father. My sister is stupid for falling for this. I told her my best advice is plan to maybe pay most of her tax return back, and to file the paperwork to establish paternity, try to get child support, and to set up visitation with the father and grandmother.

To add a kicker to the tax problem, supposedly the IRS is saying 3 people claimed him, which just confuses me even more because the third person has not been revealed by the IRS. I am assuming perhaps the father as well.

I thought the legal parent(my sister in this case) has the right to claim the credit. I am just confused because the fact the grandmother receives public assistance, it would appear to the IRS that she has the legal right to claim the credit.

Sorry for the long confusing story, Just trying to give all the known details and give my sister the right advice.

 

[army judge]

The person that proves the child lived with them for MORE than 51% of the year and provided more than 51% of the child's support is probably in the clear!!!

Or, if someone has a court order proclaiming their ability to claim him in their federal taxes.

The other's aren't serial killers.
They'll just get a bill from the IRS for a few thousand bucks and will have to pay it out right or make payment arrangements of their choice.

Next year they had better reach an agreement beforehand.

The one that keeps the child during the school year is the likely candidate.

 

[MorgansDaddy]

he is only 3 so not school age yet. I am sure the fact that the grandmother gets public assistance will mean my sister will be paying back money like I told her to expect. I'm hoping she is smart enough to listen to me when I tell her to file to establish paternity, support and visitation. Then she will never have to worry about it again and eat her loss from last year's taxes.

 

[Proserpina]

Unless they had form 8332 signed by the CP, nobody else should have been claiming the minor dependents...

 

[MorgansDaddy]

See I think the problem will be that there has never been a court order to establish anything whatsoever. Thus the IRS will have to determine who can prove they had the child more than half of they year and being the grandmother gets public assistance for him, that may serve to prove they can claim him even though I guess my sister is actually the custodial parent with not court orders in place and that she is the only person listed on the BC. Hell maybe her paying a few thousand dollars back would be a wake up call to go get some sort of court order in place as I have been telling her since my nephew was born.

 

[army judge]

See I think the problem will be that there has never been a court order to establish anything whatsoever. Thus the IRS will have to determine who can prove they had the child more than half of they year and being the grandmother gets public assistance for him, that may serve to prove they can claim him even though I guess my sister is actually the custodial parent with not court orders in place and that she is the only person listed on the BC. Hell maybe her paying a few thousand dollars back would be a wake up call to go get some sort of court order in place as I have been telling her since my nephew was born.

Your advice was spot on.
She should listen.
But, SOME people think they know more than others.
It isn't that you were being a KNOW-IT-ALL, you were trying to avoid this mess.
The IRS teaches a painful financial lesson to those who fail to learn.
You tried.
You can't do anymore than that with some people!

 

[MorgansDaddy]

Yeah, not sure she will take my advice this time around. Her boyfriend told her they can't come after her to recover anything they paid her. All I could do was laugh and suggest she believe that all she wants.

 

[army judge]

Yeah, not sure she will take my advice this time around. Her boyfriend told her they can't come after her to recover anything they paid her. All I could do was laugh and suggest she believe that all she wants.

He's an uneducated idiot.

They'll take what they CLAIM you owe them by hook or crook.

They'll also include penalties and interest.

So, if they CLAIM you owe them $500, when they get through with penalties and interest, it'll be $1,500 they've assessed you!

They'll get it by holding your 2010 refund, attaching your wages, and eventually your home.

They are RUTHLESS.

 

[MorgansDaddy]

Well with the exception of the home, I told her the exact same(I don't think she will ever own a home).