When filing taxes is it illegal to claim EIC from more than 2 dependents from the same household?

Question

I work for a financial aid organization that gives grants to children from families who couldn't otherwise afford a private school education. So I look at a lot of tax returns from these low-income families.

So here's the question. I frequently see married couples, file separately on their taxes and they file as "head of household" when they actually are married.

Say for instance, they have four children: one parent claims two of their children who are eligible for the EIC (Earned Income Credit) and the other parent claims the other two, so they can both receive the EIC rather than filing together and qualifiying for only two children. I'm sworn to not disclosing this type of info to the IRS but I think this is illegal.

So is it really illegal and what are the consequences for doing something like this?

Answer 1

I dont think it is illegal. They are allowed to file separately, even if married. They lose some of the standard deductions for doing it, but they probably more than make up for it with the EIC.

Answer 2

i assume that your fiance lived with you all year in 2007. If not, you could not declare him as a depending. the subsequent question is: Did you grant over 1/2 of your fiance's help? If not, you could not declare him as a depending. The very last imagine to envision is his earnings. The IRA money isn't taxed except he withdrew that money. out of your advice i do not see $3,four hundred concern to tax. If he made decrease than $3,four hundred then you truthfully will be in a position to declare him as a depending. obviously, he desires to satisfy citizenship criteria and in no way be filing a joint go back with somebody else, and in no way be a depending of somebody else. even with the undeniable fact that, you could not report as head of kinfolk in accordance to an unrelated depending. The depending would could be an wide relative mutually with a baby, figure, or sibling.