Ok, here goes, my mom was awarded full custody of her great nieces (my cousins) since their births. After mom took seriously ill, I moved into the home w/her and the girls and was their sole provider. I filed taxes and claimed all of them as dependents and was told by the tax preparer that I qualified for the Earned Income Credit. My claim was processed and I received a refund plus the EIC. The following year, the same thing....then I get a letter saying that I was not eligible to receive the EIC due to the kids not being a part of my "immediate" family and they are now requesting ALL of the money back PLUS interest. I filed an appeal and received a certified letter saying they would be back in touch with me. Six months later I get a letter from the tax court (certified mail) stating that I had failed to submit forms and fees and my case was dismissed. The IRS claims they sent a time stamped letter via regular mail and it's my word against theirs if I recv'd it. Can I fight this?
2007-04-02 04:13:07 · 4 answers · asked by Lishi 2 in Business & Finance ➔ Taxes ➔ United States
Unfortunately for you, cousins are not qualifying persons for getting EIC. The tax preparer who told you it was OK was wrong. Siblings or their descendents are, so they would have been qualifying persons for your mom, although not for you unless they were officially placed with you as foster children.
The IRS is getting better at verifying claims to see if the claims are legit. Once they discovered that you were claiming them for EIC even though you weren't eligible, they would have checked prior returns to see how long this had been going on. The EIC would have been disallowed, and you'd have to pay back the money you'd gotten that you weren't entitled to.
Hiring a lawyer isn't going to help. You weren't eligible for EIC, so the IRS is requiring you to pay back what you got illegally, even though you thought it was OK.
Sorry. I know it's a lousy thing to happen. If that tax preparer is still around, you could complain to them and maybe get your fees refunded, but the IRS is just following the law.
2007-04-02 12:57:03 · answer #1 · answered by Judy 7 · 1⤊ 1⤋
Your preparer was wrong you were not able to take the EIC. I would go back and take the issue up with your preparer and ask for the fees you paid back. Also get someone to represent you.
2007-04-02 05:24:47 · answer #2 · answered by momzadork 3 · 0⤊ 0⤋
Don't hire a tax lawyer, waste of money. If you have documentation and proof, you can still fight it. You need to be able to prove that your cousins lived with you all year and you supported them. (Things like school records, doctor's statements, anything to prove they lived at the same address as you.) You need to go see someone who knows how to respond to the letters and who has experience with this. (accountant, EA's) It'll will take a little bit to sort out the mess, but if you have the documentation you can reverse their decision.
2007-04-02 05:16:45 · answer #3 · answered by Fool in the Rain 6 · 0⤊ 3⤋
You can fight it, but it will be a long battle! The govt has made filing taxes so difficult, that the ordinary person can no longer do it effectively.
Your best bet, is to hire a lawyer, (depending on the amount of the tax that is owed). If you attempt to fight this yourself, you will probably lose.
Good Luck!!
2007-04-02 04:19:54 · answer #4 · answered by pnk517 4 · 0⤊ 4⤋