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lgree1223

Grandparents wont stop filing my children on their taxes

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My daughter, her boyfriend and their two minor children have been living with his parents the past few years. His parents got the SS#'s on both kids and filed the 4 of them on their taxes with HIS permission but not my daughters. She wanted to file them herself. This continued the next 2 years and every year she said NO and they did it anyways and gave them a "portion" of the money received. They have just recently moved out from the in-laws home and they are already saying that they are going to file the "kids" again this year,. They have the children's ss#'s .. how can they stop them?

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They can't control how the boyfriend's parents complete their tax returns.

 

If, under the applicable IRS regulation, your daughter is entitled to claim her children as dependents, then she should do so on her returns.  If the father's parents also claim the children, then the IRS and the state taxing authority will investigate.

 

By the way, is the boyfriend the children's father and, if so, has his paternity ever been established?

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1 hour ago, lgree1223 said:

My daughter, her boyfriend and their two minor children have been living with his parents the past few years. His parents got the SS#'s on both kids and filed the 4 of them on their taxes with HIS permission but not my daughters. She wanted to file them herself. This continued the next 2 years and every year she said NO and they did it anyways and gave them a "portion" of the money received. They have just recently moved out from the in-laws home and they are already saying that they are going to file the "kids" again this year,. They have the children's ss#'s .. how can they stop them?

 

File first would certainly throw a monkey wrench into the GP's plans. 

 

Who provides 50% of the kid's financial care?  The shelter we know, it is the GPs. What about food and clothing.

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My daughter and her boyfriend provide total financial care and food, clothing. They have moved out from the GP's. I advised her to file quickly as soon as she gets form this year and if the GP's file then they can be investigated. 

1 hour ago, PayrollHRGuy said:

 

File first would certainly throw a monkey wrench into the GP's plans. 

 

Who provides 50% of the kid's financial care?  The shelter we know, it is the GPs. What about food and clothing.

 

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I am guessing that your daughter was kind enough and smart enough not to claim her children as dependents (before now) because she realized there would be a conflict/or confusion with the IRS about this, and so your daughter graciously backed off from claiming them if she knew that the grandparents had already done so.  If your daughter had gone ahead and filed using her children as dependents, the matter would have been looked into before now.

 

Your daughter can go ahead and claim the dependents on her return at any time, and it would be better if she files first, but if she doesn't, it won't matter in the end.  When the IRS gets  your daughter's return and the grandparents' return and sees that the Social Security Numbers for the children match on both returns, they will begin to investigate to determine who is the correct party who is eligible to claim.  The IRS will send your daughter and the grandparents a form or notice about how the correction will be made.

 

Your daughter needs to ask whether she should file an amended federal income tax return for any previous year's tax returns where someone else erroneously claimed her children as dependents and maybe she can receive a refund.  I don't know whether the grandparents will be asked to pay back the IRS for any monies they wrongfully claimed and were not entitled to claim.

 

If you have any questions about this you can discuss with the IRS on their toll-free number or with a local federal income tax preparer.

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FWIW, given that your daughter and her kids moved out of the other grandparents' home before the halfway point of this year, it would arguably be tax fraud for the grandparents to claim the kids as dependents.

 

As far as prior years, it's probably water under the bridge as far as your daughter's kids, but I'm wondering how your daughter's boyfriend handled his own tax returns (he obviously could not file jointly with your daughter).  Did he not take an exemption for himself on the basis that someone else (his parents) could claim him?  For that matter, did your daughter do that for herself?  It's one thing for your daughter to allow the boyfriend's grandparents to take the deductions for the kids, but for herself as well?

 

There are two bases on which an adult can be claimed as a dependent by another adult:  (1) qualifying child; and (2) qualifying relative.  To be a "qualifying child," among other things, the son would have had to have been under 19 years old or under 24 and a full-time student (or "permanently and totally disabled").  Did your daughter's boyfriend meet this qualification for any year?  Your daughter cannot have been her boyfriend's parents' "qualifying child."  To be a "qualifying relative," it's not actually necessary to be a relative if the person lives with you all year.  However, for 2018, a person could not have been a "qualifying relative" unless that person had $4,150 or less in gross income for year.  Did either your daughter or her boyfriend have less than that minimal level of income?

 

If I were your daughter, I might think hard about consulting with a tax lawyer or tax accountant about submitting amended returns for prior years.

 

P.S.  Hopefully I got all the above correct, and I'm sure "Tax_Counsel" will correct me if I didn't.

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She can't stop the grandparents from claiming anything on their returns. For the years 2018 through 2025, as the tax law stands today, the dependent exemption is zero and thus there is no tax benefit for claiming a dependent. There are the child tax credits, however, and those credits do depend in part on whether the taxpayer would qualify to claim the kids as their dependents. All she needs to do is claim the child related tax benefits on her return that she qualifies to take. If someone else claims the same tax benefit for the same child the IRS will catch that on computer matching about a year after the returns are filed and spit out letters to each of them to start the process of verifying which one was entitled to those benefits. The one not entitled to it will have to pay back the tax they saved from the benefit, as well as interest and possibly a penalty, too.

 

Note that if both of you file electronically and claim the same benefit(s) for the same person the IRS will reject the second filed electronic return. All that means is that the person with the rejected return will need to file on paper instead and wait about 4 weeks or so longer to get any refund check. That short delay is the only disadvantage to filing second. So no need for her to get overly worked up in January simply to file first.

 

I'll not get into the details here of what the requirements are to claim the dependent exemption or the child tax credit. She can read those rules in Publication 501 (dependents) and Publication 972 (child and dependent credit). If she's interested in amending prior year returns she'd need to look at the prior year versions of those forms as the rules change a bit from year to year, especially the changes from 2017 to 2018 that occurred with the Republican Tax Act passed in December 2017. Note that it may be that the grandparents were entitled to one or more of the dependent exemptions they claimed during the years everyone was living in their home, so she'd need to read the rules carefully for those years. She can only amend returns as old as 2016 now and get a refund. It's too late for years before 2016 unless she paid that tax within the last two years.

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As far as the questions PG1067 was asking regarding previous years filings, I am unsure. My daughter was a stay at home mom and her boyfriend worked. His parents claimed everyone. My daughter is 25 and her boyfriend is 26. I honestly dont know how she got away with it or what their filing status was ect. The boyfriend (I dont think) has filed his own taxes EVER. All I know is that its a mess and the best thing for my daughter to do now since she IS working and is able to file, is to claim herself and her two children and let all them work out the rest with the IRS. 

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Dare I say that a long term relationship with someone who's 26 and has never filed his own taxes despite having a full-time job may not be the smartest thing in the world.

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2 minutes ago, pg1067 said:

Dare I say that a long term relationship with someone who's 26 and has never filed his own taxes despite having a full-time job may not be the smartest thing in the world.

 

 

Dare, dare.

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5 hours ago, pg1067 said:

Dare I say that a long term relationship with someone who's 26 and has never filed his own taxes despite having a full-time job may not be the smartest thing in the world.

 

The boyfriend likely either (1) had refunds due him for the years he didn't file, some of which may be too late to claim due to the statute of limitations for refunds or (2) owes money to federal and/or state governments of tax, penalty, and interest. The former is not such a big deal except that it's foolish to leave your money with the government and not claim it, but the latter is a problem she'd want to ensure he fixes before she contemplates marriage or a long term commitment with the guy.

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There are a lot of people who work and have never filed tax returns.  I have had several as clients.  They were usually cash basis painters or handymen.   There were illegal immidrants who gave their employer false social security numbers and moved on when the IRS notified the employer the SSN didn't match their records.  The issue sometimes came up when the client was injured and asked for lost income damages.  

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Her boyfriend is Caucasian, not an illegal immigrant but he HAS worked alot of cash-pay jobs in construction, landscaping, boat repair ect. I do know that he has also had some regular W-2 jobs. Maybe the offset between the cash jobs and the W-2 jobs annually meant he did not make enough (legally) to file. Im not sure.  

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15 hours ago, pg1067 said:

Dare I say that a long term relationship with someone who's 26 and has never filed his own taxes despite having a full-time job may not be the smartest thing in the world.

I agree

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1 hour ago, lgree1223 said:

Her boyfriend is Caucasian, not an illegal immigrant but he HAS worked alot of cash-pay jobs in construction, landscaping, boat repair ect. I do know that he has also had some regular W-2 jobs. Maybe the offset between the cash jobs and the W-2 jobs annually meant he did not make enough (legally) to file. Im not sure.  

 

It is required to report and pay taxes on "cash jobs" as well as W-2 jobs.

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4 minutes ago, PayrollHRGuy said:

 

It is required to report and pay taxes on "cash jobs" as well as W-2 jobs.

I understand this, lol. He will have to answer to the IRS whenever that day comes. My original question was answered, I do appreciate your help, all of you!

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