Wrongfully Claimed Dependent, What Proof is Needed

[PharmDog]

We are taking care of children that are not biologically our own, they have lived with us the entire year while their mother lived in another state and provided no support. She has claimed them on her taxes. We intend to file by paper. What information will the IRS require to prove that we had them all this time?

[Bubba Jimmy]

When two returns arrive at the IRS, they process both returns (although as you point out, the 2nd one cannot be filed on paper). They typically will also issue full refunds on both returns. Then they will send a letter explaining that two returns have been received claiming the same dependent/qualifying child. The letter explains the rules and instructs the person who was not entitled to claim the child to amend their return. If no one amends they will then ask both parties for evidence to support their claim.

Evidence can include school records showing the address the child is enrolled under, medical records, names on apartment leases, etc., and anything else that shows an address for the child. Immunizations at the health department can be helpful. Also, any receipts for items paid on behalf of the child like medical bills can be very helpful. If the child lived with you, there should be some documented evidence of that.

[PharmDog]

Thank you for your help Bubba. What consequences will she face when she is found to have been in the wrong, just garnished wages, etc? I'm sure she wont be able to pay back. Is it too much to hope for jail time?

[Bubba Jimmy]

They don't put people in jail just because they claimed a dependent improperly, the penalties are all financial. But, the IRS is the world's best collection agency. They know where you work, they know where you live, and they know where you bank. If you have no job, no bank account, and no assets then they can't collect and after 10 years you don't owe them any more.