What is the correct relationship for a child, when the taxpayer has legal custody?

[omega106]

So I have a new client that has legal custody of two young girls. The previous office that filed her taxes put one of the dependents as Daughter and the other as Foster Child. I corrected to put both children as Foster Children, considering that she has a court order. The children are not biologically related to her, am I reporting the relationship the correct way? My client wants me to put daughters for both but I have told her that I cannot do that. Any ideas on the correct relationship?

[qbteachmt]

"am I reporting the relationship the correct way?"

There are legal relationships and even no relationships (just responsibility), such as: children, foster children, adopted children, and just having custody, as well as minor, or adult; and guardian.

For Tax Purposes, you are asking about Dependents.

None of that is equivalent. And what to use depends on what you are using it for.

Adopted Children are family. Foster Children are placements.

[sjrcpa]

What's the harm in using daughter? Especially since the custodial adult thinks of them that way.

[BobKamman]

A foster child is any child placed with the taxpayer by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.  It is not an adoption, and the placement or order can always be changed, but if she wants to tell the world that these are her daughters, she can as long as it's not for fraudulent purposes.  She should tell IRS that they are foster children, and make sure they qualify otherwise as dependents.  Suggest she go be sensitive about it elsewhere, you're busy now.  

[RollTide68]

Some states do not allow deductions/exemptions for Foster Children.  Specifically Alabama does not.

[sjrcpa]

Does "legal custody" as stated by OP mean foster child?

[qbteachmt]

Payments to you do not get made because of your natural child. However, payments often are made to you because of a Foster placement. In MT, you are not supposed to take foster children to another County, much less across State lines, without advance permission and notification of intent. No one shows up at your door to stop you from taking your own kids to a National Park for the weekend.

There are lots of differences.

[qbteachmt]

"Does "legal custody" as stated by OP mean foster child?"

Nope. The custody is with the State.