What to Do If Someone Illegally Claimed Your Child on Their Taxes
Learn how to address and resolve issues when someone unlawfully claims your child on their taxes, ensuring rightful tax benefits.
Tax season can bring unexpected challenges, especially when someone else claims your child as a dependent without permission. This situation complicates your tax return, delays potential refunds, and can create legal headaches.
Addressing this issue promptly is crucial to ensure your financial responsibilities are accurately reported and resolved. Understanding the necessary steps can help mitigate the impact of unauthorized claims.
Identifying the Unlawful Dependent Claim
The first indication of an unauthorized dependent claim often occurs when your electronically filed tax return is rejected by the IRS, stating that the dependent’s Social Security number has already been used. This notification signals the need to investigate further.
Gather documentation to support your rightful claim. This includes birth certificates, custody agreements, and other legal documents proving your relationship and financial responsibility for the child. IRS Publication 501 outlines the criteria for dependents, such as residency, support, and relationship tests. Familiarizing yourself with these guidelines can help confirm whether another party’s claim is unlawful.
In some cases, the issue may stem from a misunderstanding, such as a relative mistakenly believing they are entitled to claim the child. Attempting to resolve the matter directly with the other party can be beneficial. However, if deliberate fraud is suspected, act immediately to protect your tax rights. This may involve filing a paper return with the IRS and submitting Form 14039, Identity Theft Affidavit, to alert them of the issue.
Submitting Corrected Information to the IRS
After identifying the unauthorized claim, submit corrected information to the IRS to resolve the matter. Filing a paper return is often necessary, as electronic submissions may continue to be rejected. Clearly indicate that your submission is an amended return and include all relevant details substantiating your claim to the dependent.
Provide a detailed explanation of the situation, outlining why the initial claim was incorrect and including evidence that supports your case. Attach supporting documents, such as court orders or school records, to establish your relationship with the dependent and your financial contributions. This documentation is critical to reinforcing your position.
Evidence to Validate Dependent Status
Establishing your claim requires thorough documentation aligned with IRS criteria. The residency test, for instance, requires proof that the dependent lived with you for more than half the year. Documents like school enrollment forms, medical records, or lease agreements can verify this.
The support test is another key requirement, demonstrating that you provided more than half of the dependent’s financial support during the tax year. Bank statements, receipts for major expenses, and other financial records are essential for substantiating this claim.
Stay informed about changes to tax codes that may affect dependent eligibility. Updates to tax credits or deductions could influence the financial implications of claiming a dependent. Ensuring your documentation adheres to current guidelines strengthens your case.
Possible Repercussions for the Inaccurate Filer
Those who improperly claim a child as a dependent may face serious consequences. The IRS treats unauthorized claims seriously, and inaccurate filers risk audits, where their documentation will be closely reviewed. If discrepancies are found, penalties may be imposed, including a 20% accuracy-related penalty on any underpayment.
If the IRS determines that the claim was fraudulent, penalties can escalate. Fraudulent claims may result in a civil fraud penalty of up to 75% of the underreported tax. In extreme cases, criminal charges could be pursued, leading to fines or imprisonment. The IRS Criminal Investigation Division handles such cases, and convictions can result in up to five years of imprisonment.
Preventing Future Unauthorized Claims
To avoid future unauthorized claims, take proactive measures to protect your child’s personal information, particularly their Social Security number. Limit access to this sensitive data and store documents securely. If you suspect the SSN has been compromised, consider placing a fraud alert or credit freeze with major credit bureaus.
Filing your tax return early is another effective strategy. The IRS processes returns on a first-come, first-served basis, so submitting your return promptly reduces the chances of someone else filing first and using your child’s information. Early filing also minimizes potential delays in processing your return.
Communication with potential claimants, such as separated spouses or relatives, is essential. If multiple parties are eligible to claim the child under IRS rules, establish a clear agreement in advance about who will claim the dependent. Legal documentation, such as a divorce decree or custody agreement, can formalize this arrangement. Addressing potential conflicts proactively helps prevent unauthorized claims and ensures smoother tax filing in the future.