Mother is custodial parent. No8332. Father files first, claimed HoH and tax credits. Mother needs refund and gets refund even if filing single. File single then amend?

[AJMorris]

The concern for the mom is twofold:

1. She doesn't want to set a precedence
2. She needs the refund and she gets a refund even if she files single.

I'm concerned if we file single then amend it will set off flags for the IRS.  The IRS practitioner help line indicated the mom's entire refund will be held up until the investigation clears which could be 3 to 6 months.

[taxiowa]

Most likely the Help desk in this case was not very helpful.  IRS does not pre-determine that the first to file is the rightful owner of the tax credits.  It only takes about 4-6 weeks by mail to get refund.  So I would file by paper with correct info including reason having to file paper form.  Then both parties usually get a letter about October with instructions to file 1040X if they claimed the dependent in error or if they need proof they are the rightful claiment.

[Just-Lisa-Now-]

This has been my experience as well....and what I see happen on the TurboTax boards all the time.

[rbynaker]

The court order does not change tax law.  With whom did the child spend more than 182 nights?

[AJMorris]

The mom, although detailed records to document this are not available.

[Just-Lisa-Now- · Accepted solution]

These are divorced parents right?  Not unmarried parents living together?

If so, to do this properly, Mom files original return by paper taking the filing status and children that she's entitled to take.  

Be sure you have proof that she's entitled to take the children and qualifies for HOH, use the worksheets in the 8867 for due diligence on your part.

[AJMorris]

Unfortunately these parents were never married.

[Just-Lisa-Now-]

but they don't live together right?

[AJMorris]

No they are apart but the court order states Mimi’s the custodial parent.

[The-Tax-Lady]

If the Mom needs the $$, e-file without the children. Then file a 1040X claiming the children and HOH status, with all the documents for proof, and don't forget to file the 8867 with the 1040X. This will get her some money now, and the refunds she's entitled to at a later point. The IRS will indicate on the ineligible parent's file that the EIC was claimed and a repayment is due to the IRS. What precedent is she concerned with setting?

[Just-Lisa-Now-]

I think that initially she let him claim the children then she changed her mind

[The-Tax-Lady]

So it will end up being a tie-breaker case?

[AJMorris]

Yes, but the mom doesn’t have detail records but is quite confident she had at least 200 nights with the child.

[AJMorris]

She was adamant, and her attorney agrees, that the parties agreed the mom had considerably more nights with the child in 2018 and was entitled to HoH and associated child tax credits, , but out of apparent spite the father decided to file and claim credits first. The mom had her own business, which is why tax info wasn’t as simple as the father’s simple W-2.

[TaxGuyBill]

As was mentioned before, I have 'heard' that both taxpayers will receive their full refunds.  Filing by mail should not take too much longer for the mom to get her refund.

Then in about 6 months they will both get an IRS notice to 'prove' their case.  When the father loses, he will need to repay the credit PLUS interest and maybe penalties.

[rbynaker]

And I'd have mom start working on a 2018 log of nights spent with her.  Without it, how can you answer #6 on the 8867?  "Yes, I asked her, she said she didn't have any records, but I gave her both HOH and CTC anyway."

[taxiowa]

I asked her and she is confident she had 200 nights is good enough for me.  Most times it is clear thru where the child goes to school or daycare as to which parent is custodial.  But you sometimes have to trust the taxpayer statements.  I would answer #6 yes if she said at least 200 nights.

[rbynaker]

To each his own.  I think the "most times" situation you describe doesn't fit the facts presented.  The question asks:

"Did you ask the taxpayer whether he/she could provide documentation to substantiate eligibility for the credit(s) and/or HOH filing status"

And the facts we've been presented with are "the mom doesn’t have detail records".  Testimony is not documentation IMO.  Tax preparation is now a form of legalized gambling, I'm not personally willing to wager $1,040 on this particular hand of cards.

[AJMorris]

Thank you, everyone, for you quick response, comments and insight!

[garman22]

"No they are apart but the court order states Mimi’s the custodial parent."

If in the separation agreement there is no mention of claiming the child (father), and there is no F8332 on file, the father has no right to claim the child. Unless he can document the child lived with him more. I would place the burden of proof on him.

So, I would paper file and await letter from IRS and respond.

[RTS1823]

Since you know this is going to go to a tie-breaker, I would have her make the log of nights and give you a copy for your records to cover yourself.

[AJMorris]

Thanks, garman22.  The mom needs the base refund to help with her costs, so I'm leaning towards filing as single instead of HoH, with no dependents...aargh.  The separation agreement does not mention the father claiming the child and there is no F8332 on file.  The joint custody agreement indicates that the JCA is continuing with prior practice between the father and the mom and the mom has the child 137 night each year.

[AJMorris]

Thanks, RTS1823.  I have already asked the mom to send me the "calendar schedule" for each quarter in 2019 (to avoid this mess going forward) and to go back and identify when the dad had the child in 2018 if possible.

[AJMorris]

Oops, garman22, the DAD has the child 137 nights each year.  The mom has the child 228 nights each year.

[garman22]

Ah, i see @AJMorris . Then I would have her document her schedule. Its always tough on us to determine eligibility. Good luck!!