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Similar to but different from Amendment After 3 Years That Increases the Tax

Two parents have a bunch of disagreements which they will hopefully be addressing soon via mediation.

Mother (M) lives out of state, Father (F) lives in NY. M has been claiming the child as a dependent on her federal taxes even though child lives with her about 1/6 of the year. (There is a custody order in place which defines the custody schedule.) Neither party has ever filed for child support.

M claims F agreed to this arrangement and she says she has proof (I think it's a recording of a conversation they had a long time ago). F says he's been complaining to M about this since she first did it 7 years ago and has even tried to claim his son, but the IRS supposedly kicked the return back because M filed earlier than F. F estimates that he would save about $3,000 on his taxes per year. He says M always files as soon as the W-2 is available, whereas it takes him longer to file because of assembling data related to his dairy farm and logging business.

The parents have never been married to each other. They lived together for a couple years but the relationship broke down during the pregnancy (F disputed paternity at first) and M moved out. M had primary custody for a number of years but then moved out of state at which time M asked F to take him while she got on her feet (which took a few years -- when she tried to regain primary custody, the court awarded primary custody to F). The child is now 14.

I read the IRS rules about claiming a child as a dependent. It's clear that neither M nor F nor their tax people understood the rules.

Questions:

How could F file something with the IRS to the effect "My son lives with me for about 2 months out of the year. I never signed a form or letter giving M my permission for her to claim our son as a dependent, which she has done for 7 years and I want to fix this going back as many years as possible. Please see attached custody orders"?

How many years could F go back?

Would filing a child support petition be the only way F could recuperate the financial benefit he was entitled to?

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    I’m voting to close this question because this requires a legal advice from tax and/or family attorney.
    – littleadv
    Feb 26, 2022 at 0:43
  • The IRS is unlikely to get involved in your dispute. You'll have to take it to a judge. I suggest talking to an attorney, nothing much you can learn here that could be useful to you.
    – littleadv
    Feb 26, 2022 at 0:51
  • Bummer. I thought you guys were experts in all things taxes.
    – aparente001
    Feb 26, 2022 at 5:48
  • The IRS is not going to be determining which one of you is lying, that's a job for the judge. You can make a refund claim with the Federal Court and try the case there, but you'll need a lawyer for that. Claims for taxes assessed and paid have to go through the Federal Court. If you just file an amended return it is going to be rejected because she filed first. That's the law.
    – littleadv
    Feb 26, 2022 at 5:57
  • @littleadv - Interesting. I read the section of Publication 17 about claiming dependents carefully, and I didn't see anything about order of filing of the two parents. Where could I read about that aspect? / It gives me an idea. Since F doesn't have all his data together yet when M files, could F file guesstimate return in early January next year, getting in under the wire first, and then have his accountant file an amended return a month or two later once F has assembled all his data?
    – aparente001
    Feb 26, 2022 at 19:28

1 Answer 1

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1040-X instructions

Generally, for a credit or refund, you must file Form 1040-X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later.

Dependent Dispute article

The steps below apply if a tax return incorrectly claimed your dependent(s) or if you claimed dependents incorrectly.

  • Gather dependent supporting documents about your dependent(s) and complete Form 866-H-Dep

Under the IRS tiebreaker rules, the child is generally considered a qualifying child if the following apply:

  • If the child has two persons as parents and the two persons do NOT file a married joint return, then the parent with whom the child lived or resided with for the longer time period during a tax year will be qualified to claim the dependent.
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  • How would one "prove that you did not live with the child's other parent for the last six months of the year"? For the other things I can see how to prove the various things. I feel like the instructions are not super clear when it comes to parents who have never been married to each other. Proposal: Custody Order + M's marriage certificate (to relatively new partner) + utility bill addressed to M + letter on letterhead from M's younger children's school. How does that sound?
    – aparente001
    Feb 27, 2022 at 2:48
  • Wouldn't the custody/support orders suffice? If filing 1040-X for the past 3 years and the custody order was more than 4 years ago, there's not much ambiguity. IRS may only care about marriage to the extent that it affects the 'married filing jointly/separately/head of household' between the parents, which doesn't apply in this case; the two parents have not shared a household at any time during the past 4 years.
    – Orange Coast- reinstate Monica
    Feb 27, 2022 at 20:44

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