IRS Audit? Why am I a target?

Question

I am being audited for claiming my nephew as a dependent on my Federal 2004 returns. He DID live with me the ENTIRE YEAR of 2004 and I DID care for him as my own child.

I believe that his father, who provides him no support or shelter, tried to claim him as a dependent also.

They are requesting my nephews birth certificate, school records, my utility bill, and my lease (to prove that he lived with me).

Does anyone know why am I being audited?

Answer 1

There are a number of random audits annually, and you may be one of those random audits.

Or, if his father also claimed him, the IRS would have flagged the dependency claim and will audit to determine actual dependent status.

It's really no big deal as long as it's true and you can prove it. IRS auditors are tough, but not evil.

Answer 2

You are not being audited, Someone else claimed the child and the IRS is going to make a determination of who was qualified to claim the child based on the information that you submit, The other person who claimed the child is being requested to submit the same information. If the child did live with you the entire year, then you have all the information they need. Just respond to the request as soon as possible,
The use of a dependants social security number twice raised a flag, alerting the IRS that there is a problem, from your information you did nothing wrong.
Call 1-800-829-1040 for more information

Answer 3

The IRS will specify what parts of your return are being audited. Since they are asking for these records, sounds like it's not an audit, but rather an investigation to see who is really allowed to claim your nephew. This happens whenever two or more people claim the same dependent on their returns - the IRS checks out both of the claims to see who has the right to. Sounds like you're probably in the clear on this. Send them what they ask for. In 2004 it still came down to who provided more than half of the child's support - rules have changed somewhat since then. If the father didn't provide support, and you did, then you should be OK.

Answer 4

It looks like you answered your own question. If his father claimed him as well, then the IRS will audit both of you, and the IRS will determine based on the proof you (and him) submit, who can claim him as a dependent. If your nephew didn't live with his dad at all, nor did he receive any support from his dad, his dad would have a very weak claim to him as a dependent.

As for the school records, you want to make sure that the school records list YOU as the custodial guardian. Also, the school records should show your address as the student's address.

I would not worry so much about it. It sounds like you can easily prove that your nephew lived with you and were supported by you. Any other documents that shows you as the custodial guardian, such as doctor's records, medical insurance records (if you are covering him under your medical insurance), etc. would just help to bolster your argument.

You might also consider getting relatives, friends, or neighbors to write letters stating that they are witness to him living with you for the entire year and you provided sole care for him.

Answer 5

first, it's not an audit, don't panic. it's like you suspect, because the father probably claimed him as well. the social security number would be on two returns and both filers claiming would be contacted to prove the deduction.

Answer 6

If your nephew did live with you, you sent him to school, you clothed him, fed him and treated him as your own child, you will have no problem getting the documentation of proof. Contact the school he attended in that school year, have pastor, teacher, neighbor write letters of proof.

good luck & blessing

Answer 7

because there were more than one claiming the same person. in your case could be his parents, so when the same s.s number was entered, the computer tells the IRS.