Illegally claiming a child on income taxes. What can we expect to see as a punishment for this crime?

Question

My sister's ex boyfriend hasn't lived with her or her son since befor he was born. He hasn't paid court ordered support either.
Recently, my mother (who has been caring for both my sister and the child) went to get her taxes done and was told that YES she could file that the child is her dependant. She did and she was notified that someone already has.

The child is 6 1/2 months old and has been living with her the entire time.

What are the Legal ramifications if any.

I'm noticing now that this happens ALOT...BUT from what the tax preparer told my mother, this is blatant disregard of the law...

ok...to those who say my mother will get in trouble...tell that to the IRS..because that is who she went to.

my sister is medically disabled so she is dependant on my mother as well.

if your theory were correct then how would grandparents raising children of parents who've abandoned them, died, gone to prison, lost them.....?

Answer 1

When 2 people claim the same child on a tax return, It raises a flag with the IRS. They will first send a letter advising that the same SSN was used twice and advise that the person who was not entitled to claim the child needs to file an amended return. Then if no one corrects the return the IRS will request from both parties to submit proof of entitlement to claim the child. The IRS will then make a detemination on who is entitled to claim the child and it the person who is seen as the one NOT allowed to claim the child will owe back any refund they received in reference to the child along with penalties and interest and their Tax return will be flagged for review for up to the next 10 years
For more clarification call the Internal Revenue Service at
1-800-829-1040

Answer 2

Fist things first. Whoever told your mother than she can claim the child is WRONG! She might be able to claim her own daughter but cannot claim her granddaughter.

Her granddaughter is already the qualifying child of another taxpayer -- the childs parents. That bars her from claiming the dependency exemption for the granddaughter. PERIOD!

If the child's mother is not filing a return or not otherwise claiming the child, the FATHER wins the tie-breaker according to Table 6 in IRS Pub 501, assuming that he otherwise meets the requirements.

The blatant disregard for the law is on the part of the TAX PREPARER who does NOT know what the new requirements are. I'd strongly suggest that you find a new tax preparer; this one OBVIOUSLY does not know what he or she is doing. (It used to be that way, but no longer is.)

If the grandmother files a return claiming the exemption, SHE will be the one who is in violation of the law.

Answer 3

Unfortunately yes, it does happen a lot, sometimes by people who just don't know the rules, and sometimes by people who are trying cheat.

Since a grandchild is a qualifying child for your mom and NOT a qualifying child of his father since he didn't live with him, the tax preparer is correct, your mom CAN claim him as long as your sister, his mother, doesn't.

The usual punishment is that the person will have their claim disallowed, and will have to pay the extra taxes with interest and possible financial penalties.

Answer 4

Jail time and fine - if you lie in your tax returns