Tax Law (Questions About Taxes)/Claiming a dependent

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Question
I am a single mother of a 7 yr old daughter. I have been her sole provider the past 7 yrs. In November 2012, my parents were given temporary custody through the courts until completion of requested programs. My parents informed me last week that they had claimed my daughter on their 2012 taxes. I have contacted the IRS and a tax prep company and was told that I wouldn't be able to e-file this yr and the IRS would do an audit to see who should be able to claim the dependent. I have the court paperwork showing that my daughter wasn't placed with my parents until November 2012, but the tax prep co told me the IRS could decide to grant my parents the right to claim. Is that possible even though the dependent was with me for over 6 months out of 2012? I am very confused and not sure how my parents could claim her without being her providers. Any information or advice would be greatly appreciated. Thanks in advance!

Answer
Shelley,

Thanks for your question.

The IRS will made a decision based on the rules.  The rules state that the exemption goes to the person with whom the dependent lived with over half the year and who provided over half the support for the child.  In addition, as mother you normally have a superior claim than your parents.

If you have not filed a paper return, go ahead and file, claiming your daughter.  This will spur the IRS into action. You (and your parents) will get a letter from the IRS indicated that the daughter's SSN has been claimed on more than one return.  You will be instructed to file an amended return if you are not entitled to the exemption.  At this point, take the offensive.  Even though the IRS does not require you to do so, respond to the IRS notice, setting forth why are ARE entitled to the exemption based on the rules.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

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I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

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DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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