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  1. #1
    Join Date
    Dec 2015
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    14

    Default Can the IRS Come After You if Your Ex- Improperly Claims Child Tax Exemptions

    My aunt doesn't know computers that well, so I am posting here for her, hope that is okay! We are from Michigan if that matters. My aunt has two kids with her ex husband. One is 5 and one is 2. She has physical custody and they share joint legal. When tax time came around she filed and claimed them as she has the past 5 years. A few months ago her ex husband ended up filing his and she got some of his back support is how she knew he had finally got his payment. But she found out from his sister that he also had filed and claimed their kids. It is not in the order who can claim them, but they are on the schedule of every other weekend so she has them more and we know according to law she is to claim them because of having them more, not him. Whoever he had do his taxes got him the money from them too. He went off and bought a truck and took his new wife on vacation. Now the IRS sent him something about paying the money back. She wanted to know if since he did all this is it going to affect her future IRS claims and what will happen to her ex? Will they take all of his money including support if it doesn't get paid back? Thank you so much in advance!

  2. #2
    Join Date
    Oct 2014
    Posts
    8,144

    Default Re: Not Sure What to Think

    The federal tax rules for divorced/separated parents basically works that the custodial parent is the one who gets to claim the dependent exemption for the kids unless the custodial parent signs a waiver agreeing not to claim the exemption and allowing the noncustodial parent to claim the child instead. Under federal tax law, the custodial parent is the parent who has physical custody for the greater part of the year (i.e. the parent with whom the kid spends the most days during the year). When both parents claim the kid, the IRS will contact both parents to figure out which one is entitled to the exemption. The parent not entitled to it must pay back the tax he or she saved by taking the exemption plus interest and perhaps a penalty as well. So he’ll have some money to pay the IRS out of this. It will not affect her future tax returns at all.

  3. #3
    Join Date
    Oct 2006
    Posts
    16,389

    Default Re: Not Sure What to Think

    Quote Quoting byefelicia
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    My aunt doesn't know computers that well, so I am posting here for her, hope that is okay! We are from Michigan if that matters. My aunt has two kids with her ex husband. One is 5 and one is 2. She has physical custody and they share joint legal. When tax time came around she filed and claimed them as she has the past 5 years. A few months ago her ex husband ended up filing his and she got some of his back support is how she knew he had finally got his payment. But she found out from his sister that he also had filed and claimed their kids. It is not in the order who can claim them, but they are on the schedule of every other weekend so she has them more and we know according to law she is to claim them because of having them more, not him. Whoever he had do his taxes got him the money from them too. He went off and bought a truck and took his new wife on vacation. Now the IRS sent him something about paying the money back. She wanted to know if since he did all this is it going to affect her future IRS claims and what will happen to her ex? Will they take all of his money including support if it doesn't get paid back? Thank you so much in advance!
    I agree with the answer that you got from Taxing Matters but I will go on to say that if your aunt's ex is pressuring her to give him retroactive permission to claim the children that she should NOT do so. A person doesn't get enough money to buy a truck and take his wife on vacation unless that person also claimed EIC. Your aunt CANNOT give him permission to claim EIC. The children did not primarily live with him.

    No matter what he says to her or what dire things he says are going to happen if she doesn't help him, she should NOT help him.

  4. #4
    Join Date
    Dec 2015
    Posts
    14

    Default Re: Not Sure What to Think

    Thank you both for your answers! This has helped a lot. I will let her know because I know she was quite worried on if she would somehow have anything to worry of future support wise or future tax wise. She never was sent anything to confirm her custody or anything via IRS, but wonder if it's possible was sent to him and just went off what he put? Either way, I did inform her NOT to help any way with the EIC parts of things. Is what he did considered fraud? Can't he get into trouble for the EIC parts of things? I was told the person that he had do his taxes now won't take his calls. So, I truly wonder if they even put that this person prepared his taxes or if they said he did to make things tougher.. is it possible he can sue this person or is it now all him since he used the money and still hasn't contacted the IRS about what he owes? Sorry for all the questions!

  5. #5
    Join Date
    Oct 2014
    Posts
    8,144

    Default Re: Not Sure What to Think

    It would be tax fraud or evasion if he knowingly took dependent exemptions that he was not entitled to take. However, if that is the only thing wrong with the return It is extremely unlikely that the IRS and DOJ would criminally prosecute for that. He might get hit with a civil penalty, though, which would increase what he has to pay for this. If he gave the preparer the correct information to prepare the return he could go after the preparer for any penalty that he has to pay out of it, assuming that the preparer cannot get the penalty waived by falling on his sword and admitting he screwed up the return. He could not successfully sue the preparer for the tax he has to pay since, if the return had been done correctly, he would have had to pay that anyway. As a result, he is not out more in tax than he owed if it had been done right. She ought not worry about what he does on his returns. Whatever trouble he gets from the IRS is on him; it will not result in problems with the IRS for her. All she needs to do is get her returns right and she should be fine.

  6. #6
    Join Date
    Oct 2006
    Posts
    16,389

    Default Re: Not Sure What to Think

    Quote Quoting byefelicia
    View Post
    Thank you both for your answers! This has helped a lot. I will let her know because I know she was quite worried on if she would somehow have anything to worry of future support wise or future tax wise. She never was sent anything to confirm her custody or anything via IRS, but wonder if it's possible was sent to him and just went off what he put? Either way, I did inform her NOT to help any way with the EIC parts of things. Is what he did considered fraud? Can't he get into trouble for the EIC parts of things? I was told the person that he had do his taxes now won't take his calls. So, I truly wonder if they even put that this person prepared his taxes or if they said he did to make things tougher.. is it possible he can sue this person or is it now all him since he used the money and still hasn't contacted the IRS about what he owes? Sorry for all the questions!
    She should not help him at all. No matter what he says.

  7. #7
    Join Date
    Sep 2010
    Posts
    19,845

    Default Re: Not Sure What to Think

    They'd never notice unless TWO people claim the dependent (this is why the IRS now wants the SSN of the kids). What happens is the IRS blocks the efile of the second return (though you can still file on paper). They send letters to both reminding them of the exemption rules (and include 1040X for convenience so you can fix it). If nobody backs down after a couple of letters THEN it goes from automatic generated letters to a real investigation.

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