Tax Question How is dependency determined by the IRS in cases of joint custody, if the agreement is only verbal? ? (Details inside)
Asked by
rojo (
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December 4th, 2014
My daughter, who is now single, claims her daughter as a dependent. She provides the majority of the funds necessary for her upbringing. She provides the education, medical care, insurance, housing, the vast majority of the clothing, child care on holidays and during the summer. She has all the paperwork associated with all of it. Since, however, she and her ex pretty well split the time with their daughter 50/50 the day to day expenses such as food and transportation are paid by the individual parent.
This has been going on for about four years although the 50/50 time split is only about a year or so old. About four years ago, when she provided the majority of the care it was decided that she would claim their daughter. This was entirely verbal however.
She recently found out that her ex has taken to also claiming her daughter as a dependent.
Being as it appears they are both claiming her, if the IRS comes after him, will they also come after my daughter?
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9 Answers
We had a similar thing, but we had two kids, so we each declared one. That was easier.
If the IRS notices this at all, they’re going to ask the ex-husband for a written agreement with your daughter, which he won’t have. So they’ll come to your daughter and ask her for the agreement, which she won’t have.
They’ll then ask both parties to substantiate the dollars spent for the last couple of years in order to determine who provided more support.
The IRS will probably want to see the divorce papers and see who was awarded custody (regardless of the dollars).
It can get ugly. Your daughter and her ex really ought to get this agreed upon and signed BEFORE the IRS gets involved.
Does the divorce or separation decree specify who has custody? The IRS usually goes by who has custody to allow the dependent to be claim. If not, you’re down to proving the dollars and that can be tough to do. The IRS usually allows the first one to file to get the claim and then they’re both left to prove their case.
I need clarification. Have they both been claiming their daughter for 4 years, or just the past year?
What @elbanditoroso said. When it turns out there is no written agreement it could get even worse than the bland words “substantiate the dollars spent”: that could result in an audit.
Even assuming your daughter has done nothing “wrong” (aside from the failure to have a documented agreement with her ex), audits are not pleasant, and auditors can always find something to justify their jobs.
She needs the agreement with her ex, and for him to stop chiseling as he has been, or to modify the agreement and give in herself, galling though it may be.
Another question, are you sure the husband knows they both can’t blame the child? He just might be ignorant of the tax code.
@JLeslie My daughter has been claiming her for the past four years; prior to that they alternated since they were together but filing separately. She does not know how many of the past four years he may have also claimed her. She thinks it may have only been last year but is not certain.
If it’s just last year one of them just needs to file a change to their taxes and cough up some money. I recommend she test it out, change the number, and see how much it would change her taxes. Not that I think it should necessarily be her who in the end makes the change, but knowing how much she might owe might help her decide what to do. Or, maybe they can compromise, change it on the taxes that would mean the smallest amount owed back to the government, and then each of them split the amount 50/50. Meaning if they owe $2,000 to the government if she does the change, then he can write her a check for $1,000 and she will pay the total bill.
If it was 2012 she would have got a notice a longtime ago. This year she’d be getting it about now.
I think they can come after you up to 3 years. Or, maybe that is how much time you get to make a change and the IRS has 7 years? I don’t remember.
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