I have a situation that thankfully is unusual, but I think pretty clear-cut with respect to the spirit of the law. I am having problems getting the situation resolved.
Some background. I am a natural-born U.S. citizen who emigrated to another country in 2003, established residency there, and filed taxes there. I have not been resident in the U.S. since I emigrated. I did not file a U.S. tax return for several years (I know, I should have, FATCA etc), and am now trying to get back into compliance by filing overdue returns for 2012-present. I fully expect to pay penalties.
While living overseas, I married and had two children. My daughter was born in 2005; my son was born in 2008.
My daughter died suddenly in 2015, age nine. I had not gotten around to getting her birth overseas recognized, and she therefore did not have U.S. citizenship or a Social Security Number. Shame on me, I know. I meant to do it, but just never got around to it.
So, in filing U.S. tax returns for 2012-2015 (all at once, to catch up), I claimed both her and her brother (the brother has an SSN) as dependents. I believe this is a valid thing to do, as she was my daughter and was in my care. They disallowed her as a dependent because of the lack of SSN.
I spoke to the U.S. consulate in my country of residency, which has said it will give me a posthumous Consular Recognition of Birth Abroad document, as well as a Consular Recognition of Death Abroad document. These will establish that she was the daughter of me (a U.S. citizen) and will effectively grant her U.S. citizenship posthumously. The Consular Recognition of Birth Abroad document was all her brother needed to apply for a SSN and U.S. passport.
I have tried mightily to get straight information from the Social Security Administration and IRS. One person at SSA said to talk to the consulate. Another person at SSA said that there is absolutely no way to get an SSN posthumously. The IRS people on the 1-800 number, including the tax law specialists, have been generally unhelpful, sometimes rude. The only vaguely relevant IRS document I have found is this, but it's not really helpful.
The tax return I have to file asks for the SSNs of my dependents. If it is true that I can't get an SSN for her (and I understand about fraud, of course), can I get her an ITIN or another identifying number? How? Will that, and/or the consular documents, be satisfactory in proving that she existed?
I am not a lawyer, but it would seem to me that the consular documents are legal U.S. proof that she was born, lived for a time, and was my daughter. SSN or not, I think I am within the spirit of the law by claiming her as a dependent.
The amount of money at stake here is significant but not huge. It's about a week's after-tax pay for me. Therefore, I'm willing to put some effort into getting her counted as a dependent, but I can't afford a legal fight. On principle, I don't think I should have to do that.
Obviously, this whole situation is painful beyond my ability to express.
Can anyone advise me as to how I can resolve this problem?