Child dependent tax issues

[RRevak]

What is the name of your state (only U.S. law)? FL

I've just received a phone call from the ex about our mutual daughter and tax returns. This is a 2 part question so bear with me.

Ex called today asking me about the tax plan for our daughter (I wasn't aware there was one). According to him he is a 1099 through his employer. He drives a limo for a company, at least I think its a company based on him always referring to "his boss" during conversations. Its never his own vehicles, they are all owned by his employer with him driving to whatever location he's sent to. He explained that since he is a 1099 that he does not have to pay taxes as he says that isn't how his job type works. He then went on to say when he checked Turbo Tax, it appeared that he was going to owe the IRS $700 and a.) he seems to not know why and thinks its wrong and b.) he says he doesn't have the money to pay it. He is asking that I allow him to claim the standard deduction for our daughter (which according to him when he ran HER as his dependent it GAVE him a $3300 return which again, sounds fishy) as if she lived with him as opposed to me. Just to note; She lives full time with me with him having liberal visitation at his discretion which comes out to a couple days a week with an overnight being only occasional. He also pays no support and provides no insurance coverage. He is asking that he be allowed to claim the deduction and he will just "give me the return in cash when he receives it". This not only seems very shady to me, it also seems to be illegal. My initial question is regarding the 1099 status and whether he is correct in stating he owes no taxes throughout the year.

My second question is the bigger one. He can be vindictive and volatile so I will have to tread carefully with this one. If I flat out say no, and he gets angry and claims her first without telling me, what will that mean for my husband and I when we file our joint return and claim her as well since i'm legally the one who can? Will is be an "oh well he bit first" so therefor he keeps the money? Or will the IRS make him prove her cohabitation and revert the return back to us if he can't? If our return is flagged what is the process of proving he claimed her fraudulently?

 

[Proserpina]

What is the name of your state (only U.S. law)? FL

I've just received a phone call from the ex about our mutual daughter and tax returns. This is a 2 part question so bear with me.

Ex called today asking me about the tax plan for our daughter (I wasn't aware there was one). According to him he is a 1099 through his employer. He drives a limo for a company, at least I think its a company based on him always referring to "his boss" during conversations. Its never his own vehicles, they are all owned by his employer with him driving to whatever location he's sent to. He explained that since he is a 1099 that he does not have to pay taxes as he says that isn't how his job type works. He then went on to say when he checked Turbo Tax, it appeared that he was going to owe the IRS $700 and a.) he seems to not know why and thinks its wrong and b.) he says he doesn't have the money to pay it. He is asking that I allow him to claim the standard deduction for our daughter (which according to him when he ran HER as his dependent it GAVE him a $3300 return which again, sounds fishy) as if she lived with him as opposed to me. Just to note; She lives full time with me with him having liberal visitation at his discretion which comes out to a couple days a week with an overnight being only occasional. He also pays no support and provides no insurance coverage. He is asking that he be allowed to claim the deduction and he will just "give me the return in cash when he receives it". This not only seems very shady to me, it also seems to be illegal. My initial question is regarding the 1099 status and whether he is correct in stating he owes no taxes throughout the year.

My second question is the bigger one. He can be vindictive and volatile so I will have to tread carefully with this one. If I flat out say no, and he gets angry and claims her first without telling me, what will that mean for my husband and I when we file our joint return and claim her as well since i'm legally the one who can? Will is be an "oh well he bit first" so therefor he keeps the money? Or will the IRS make him prove her cohabitation and revert the return back to us if he can't? If our return is flagged what is the process of proving he claimed her fraudulently?

Number 2: If he claims her before you, you'll have to file a paper return. In your situation he's only allowed to claim her if you release your claim with the 8332 form. IRS will sort it out relatively easily for you...but honestly? If he hasn't filed yet, go ahead and file first.

 

[RRevak]

Number 2: If he claims her before you, you'll have to file a paper return. In your situation he's only allowed to claim her if you release your claim with the 8332 form. IRS will sort it out relatively easily for you...but honestly? If he hasn't filed yet, go ahead and file first.

What exactly is a paper return and how would we go about filing it? I'm aware of the 8332 from my long time readings on this forum and at this point really don't feel comfortable enough with the situation to allow it. I know him well enough to know he is more than capable of saying something went wrong and keeping the money. We planned on doing our taxes this coming weekend since i'm still waiting on a couple forms from my daughters school regarding the tax ID for aftercare expenses. Also, is there any way to know whether he has already filed and claimed her? Based on his statements I know he has already done the legwork and is ready to hit submit, i'm just not sure whether he has actually done it or not.

 

[RRevak]

Also, without the 8332 how easy is it for him to claim her?

 

[Proserpina]

Also, without the 8332 how easy is it for him to claim her?

He can't legally do it. Yes, he can physically file - but he can end up not only annoying the crap out of the judge but also irritating the folks at IRS. Neither is good for him.

Either of you can E-file. But if he does it first, yours will be kicked back and you'll have to do a paper return. If you file yours first, tough luck for him.

You can read a bit here: http://taxes.about.com/od/preparingyourtaxes/a/paperorefile.htm and http://www.irs.gov/uac/Where-to-File-Paper-Tax-Returns---With-or-Without-a-Payment


If you haven't been court ordered to alternate years, there's no reason for you to hand over the 8332 to begin with.

 

[OHRoadwarrior]

If he improperly claims the child and you clear the paperwork up he can incur a multi year period of ineligibility to claim the credit. A paper return is simply filing the old fashioned way by mail and enclosing proof you are entitled to the deduction. As a 1099 employee he is required to pay taxes as a self employed individual on that portion of his wages not offset by allowed deductions.

 

[FlyingRon]

1099 employee is an oxymoron.

As pointed out, efile won't accept a return if it has a dependent someone already claimed.

If two people claim the same dependent, then the IRS will send them both a 1040X and ask they fix it.

If nobody voluntarily removes the duplication, then you'll both likely be asked to defend your position.

 

[davew128]

What exactly is a paper return and how would we go about filing it?

Usually with an ink-jet or laser printer, letter sized paper, and whatever postage is required for the weight of the assembled tax return at the post office.

 

[LdiJ]

What exactly is a paper return and how would we go about filing it? I'm aware of the 8332 from my long time readings on this forum and at this point really don't feel comfortable enough with the situation to allow it. I know him well enough to know he is more than capable of saying something went wrong and keeping the money. We planned on doing our taxes this coming weekend since i'm still waiting on a couple forms from my daughters school regarding the tax ID for aftercare expenses. Also, is there any way to know whether he has already filed and claimed her? Based on his statements I know he has already done the legwork and is ready to hit submit, i'm just not sure whether he has actually done it or not.

Dave kidded you a little bit about this but there are lots of younger people out there who have no idea what a paper return is.

When filing a paper return, you print out the tax return on paper...with all of the schedules and forms that go with it. You staple copies of your W2s (or any other document that has withholding on it) to the front of the return, and you mail it to the IRS. It takes them 4-6 weeks to process a paper return and issue a refund.

Once you print it out, if you are confused at all what pages you need to mail in, and in what order, ask one of your parents or your husband's parents. They will likely remember how a paper return should look. Or, use a tax professional to prepare your paper return.

However, don't automatically assume that you need to do so unless you electronically file and get rejected.

 

[LdiJ]

What is the name of your state (only U.S. law)? FL

I've just received a phone call from the ex about our mutual daughter and tax returns. This is a 2 part question so bear with me.

Ex called today asking me about the tax plan for our daughter (I wasn't aware there was one). According to him he is a 1099 through his employer. He drives a limo for a company, at least I think its a company based on him always referring to "his boss" during conversations. Its never his own vehicles, they are all owned by his employer with him driving to whatever location he's sent to. He explained that since he is a 1099 that he does not have to pay taxes as he says that isn't how his job type works. He then went on to say when he checked Turbo Tax, it appeared that he was going to owe the IRS $700 and a.) he seems to not know why and thinks its wrong and b.) he says he doesn't have the money to pay it. He is asking that I allow him to claim the standard deduction for our daughter (which according to him when he ran HER as his dependent it GAVE him a $3300 return which again, sounds fishy) as if she lived with him as opposed to me. Just to note; She lives full time with me with him having liberal visitation at his discretion which comes out to a couple days a week with an overnight being only occasional. He also pays no support and provides no insurance coverage. He is asking that he be allowed to claim the deduction and he will just "give me the return in cash when he receives it". This not only seems very shady to me, it also seems to be illegal. My initial question is regarding the 1099 status and whether he is correct in stating he owes no taxes throughout the year.

My second question is the bigger one. He can be vindictive and volatile so I will have to tread carefully with this one. If I flat out say no, and he gets angry and claims her first without telling me, what will that mean for my husband and I when we file our joint return and claim her as well since i'm legally the one who can? Will is be an "oh well he bit first" so therefor he keeps the money? Or will the IRS make him prove her cohabitation and revert the return back to us if he can't? If our return is flagged what is the process of proving he claimed her fraudulently?

And to comment on this post, yes, everything he is wanting to do is flat out illegal. There is absolutely no way that he could get that kind of refund by claiming your daughter unless he is claiming that she lives with him, and therefore claiming tax attributes he is not entitled to receive. DO NOT go along with him at all on this.

What will happen if he files first is that he will get the refund. You will file on paper, as discussed, and you will also get your refund. Then sometime in Nov/Dec you will both get letters stating that there has been a duplicate claim, and the IRS will ask that whoever filed in error to please amend their return. You will ignore that letter since you rightfully claimed her.

You may then get a second letter (or you may not if they believe it was more likely that your ex was the one in error) asking you to prove that you have the right to claim her. You will provide said proof, he will not be able to do so, and then he will have to pay back every cent he got that he was not entitled to receive, and he will also be banned from claiming EIC FOR ANY CHILD for at least two years, and maybe 10. It will be two years if the IRS believes that he simply didn't understand what he was doing. It will be 10 years if the IRS thinks he did it on purpose.

 

[LdiJ]

Usually with an ink-jet or laser printer, letter sized paper, and whatever postage is required for the weight of the assembled tax return at the post office.

Come on Dave...if you have never had a client ask you what a paper return is...then you must not have many clients under the age of about 30-35...LOL. How many years has it been since the IRS automatically sent out forms and instructions to taxpayers? I cannot even remember.

 

[RRevak]

I've literally never filed a paper return because i've either done it electronically or through a professional (when I was younger). I don't even remember if i've ever even seen one so forgive my ignorance on the issue. Pro, we have no orders for rotation since we have no formal orders for custody. He never wanted formal orders. He always said it was because he felt that would be unfair to him (afraid he would get less time than he wanted) but I know the real issue is he never wanted to risk child support attachments. Our agreement regarding his time with her is just between us. He calls and says when he wants to pick kiddo up, I say Ok and send her on her way or he comes to my home to spend time with her while I go out to leave them be. That's a large part of why I won't allow him to claim her. He said after the fact that he wanted to keep a thousand dollars out of the $3300 he said he would receive. I know there is NO universe in which he is entitled to that money when its been me supporting her financially. He then changed his story to not being able to be eligible for school loans if he did not file a tax return this year, so if I didn't allow him to claim her that he would "just have to not file his taxes because he didn't have enough money for even a small repayment plan" and I would be screwing him out of the ability to go to college. Then it was back to "well you'll be making much more than you would be if you filed her yourself so this is a great idea". Again, it all just seems ridiculously fishy to me.

FlyingRon, he told me he was both a 1099 AND an employee. He told me that was how every transportation business here in FL does it. I asked why he wasn't paying his taxes and I got some convoluted story about how I just didn't understand the "business". He also told me he receives a W-2 for secretarial work he also does for the same boss. I'm now thinking he made a giant financial mistake tax wise and is now asking me to fix it. Maybe i'm just confused, I don't know. I do know that we're eFiling this weekend so i'm crossing my fingers he doesn't go home tonight and hit that submit button. My husband and I have plans to use our return for a portion of our daughters upcoming medical expenses and don't have a back-up plan because we didn't think we needed one. It would really put us in a bind if things were delayed because he decided to stop playing nice.

 

[RRevak]

And to comment on this post, yes, everything he is wanting to do is flat out illegal. There is absolutely no way that he could get that kind of refund by claiming your daughter unless he is claiming that she lives with him, and therefore claiming tax attributes he is not entitled to receive. DO NOT go along with him at all on this.

What will happen if he files first is that he will get the refund. You will file on paper, as discussed, and you will also get your refund. Then sometime in Nov/Dec you will both get letters stating that there has been a duplicate claim, and the IRS will ask that whoever filed in error to please amend their return. You will ignore that letter since you rightfully claimed her.

You may then get a second letter (or you may not if they believe it was more likely that your ex was the one in error) asking you to prove that you have the right to claim her. You will provide said proof, he will not be able to do so, and then he will have to pay back every cent he got that he was not entitled to receive, and he will also be banned from claiming EIC FOR ANY CHILD for at least two years, and maybe 10. It will be two years if the IRS believes that he simply didn't understand what he was doing. It will be 10 years if the IRS thinks he did it on purpose.

Thank you, this is a massive help! It makes me much less nervous about the IRS coming after my husband and I and makes me feel more confident if they do. And yes, he is asking to claim her as if she lived with him full time.

 

[TinkerBelleLuvr]

Do NOT let him claim your daughter. Everything he is saying points to him claiming EIC illegally. If you cannot file electronically, the softwares allow you to print and mail them. Attach your W-2s to the return and mail it where it tells you to in the instructions.

It sounds like he is using the Child Tax Credit to pay for the taxes and also claiming EIC.

He made his bed - let him lie in it.

 

[RRevak]

Do NOT let him claim your daughter. Everything he is saying points to him claiming EIC illegally. If you cannot file electronically, the softwares allow you to print and mail them. Attach your W-2s to the return and mail it where it tells you to in the instructions.

It sounds like he is using the Child Tax Credit to pay for the taxes and also claiming EIC.

He made his bed - let him lie in it.

Yes that is exactly what he wants to do and is asking me to allow it. I politely told him no because I was uncomfortable with the whole thing. What makes me nervous is this is the first year he's ever asked (except for the year she was born), he is REALLY pushing this, and told me he already "ran it through Turbo Tax". I even offered to voluntarily rotate years starting next year if he provided some support, even a few dollars and contributions to school expenses etc, but he said that would never work because he couldn't spare even a few dollars per month towards support. I really try to work things out amicably with him but sometimes he really doesn't want to see the bigger picture *sigh*