Do I have a case for billing malfeance?

Question

This tax year(2006), I lost the claiming of 2 dependents on my tax filing to my ex-wife because I had outstanding child care payments due(the final order makes this stipulation). The childcare center has an amazingly "hokey" billing system, and it turns out I wasnt made aware of an outstanding balance till mid-February...too late to rectify to keep my 2 dependents on my taxes for 2006. The billing practices of this childcare center are archaic and can not be understood by the parent(me). This billing SNAFU cost me the loss of the EIC credit and I now owe IRS +$4400 because of this misunderstanding of the childcare centers billing procedures/unclear-hidden outstanding balance. Do I have a case for billing malfeance?

Answer 1

Shouldn't you have known how much you were supposed to pay for the child care, and how much you had or hadn't paid, whether they sent you a bill marked overdue or not?

And by the way, unless your kids live with you for over half of the year, then you aren't allowed to use them anyway to claim EIC even if you could have claimed them as dependents. So maybe it didn't cost you nearly as much as you thought - and might have saved you from an audit, since the IRS is checking EIC claims closely this year to try to identify illegal claims.

Answer 2

For the answer about 'malfeasance' you should seek out legal advice from an attorney. But for your tax situation you might want to seek out tax advice. Currently in most cases concerning child dependency of divorced parents you look at the divorce agreement, or the facts and circumstances if the divorce agreement does not stipulate who gets the child or children as dependents. Generally it is not determined based on your payments of child support. Again you need to seek out the advice of a qualified tax preparer.

Answer 3

The "billing practices" of a child care center have NOTHING to do with the determination of your claim to the exemption for your children! Where you come up with that idea is utterly beyond me -- do please explain how you came to that conclusion!

If the children lived with you for more than half of the year, you get to claim the exemptions and any associated credits. The child care center's billing procedures have NOTHING to do with determining how much time the children spent living in your home.

If the children lived with the other parent for more than half of the year, he or she gets the exemption claim. Again, the child care center's billing procedures have NOTHING to do with determining how much time the children spent living in the other parent's home.

So, to answer you question: No, you have no claim against the child care center as far as your "lost" exemptions or credits are concerned since their procudures have NOTHING to do with your eligiblity for EITHER.