<p>I am helping a friend file her tax return who was divorced late in 2011. So in 2012 she only worked about 5 months (she was looking for a job) so her income for the tax year meet the requirement for the IRS Earned Income Credit. She is the custodial parent and the divorce papers say her husband claims her older daughter (7) and she claims the baby (3). But when going through Turbo Tax, it says she gets to claim both children on the EIC because she is the custodial parent and she meets all the requirements, which is great because her return blossomed to over $3k and she was super happy. Until…she got an email saying the return was rejected because another return (we are guessing the ex) used her older daughter’s social on an EIC form and only one person can do that. Everything I have read states that she is in the right, but getting this man to amend his return will be like squeezing blood from the rock. I am guessing she could paper file and the IRS would have to investigate him filing the EIC, and everything I have read points to that burning him in the backside but she could really use this refund in the next few weeks. Does anyone know how long it normally takes the IRS to work this stuff through? When we amend her return and remove the older daughter from the EIC worksheet her refund is reduced by almost $2100. Would this mean her ex’s refund was $2100 more than it should have been? Any advise would be appreciated because I have never dealt with this credit before.</p>
<p>If she is the custodial parent, then she would have to sign form 8332 to release the claim to the exemption so he could claim the child on the tax return. If she signed it, then there is nothing she can do. If she did not sign it, then he can go to court to force her to sign the 8332 per the divorce papers. In either case, she does not get the exemption.</p>
<p>Have her ask the dad how much he saved in taxes. If less than $2100, then she can pay him what he saved, and she takes the difference. Do it today since he will owe failure to pay penalties if he amends his return after today.</p>
<p>BTW: If she files the paper return, I think they will reject that part of the return and pay her the revised amount. That will take weeks to get a refund.</p>
<p>The distinction here is that we are not talking about the standard deduction. He took the deduction, she did not. That is the way it’s suppose to be. No problem there. The issue is with the Earned Income Credit. The EIC is a qualifying credit based off her lower income and the fact that she had two children living with her more than 6 months out of the year. She sent me an email overnight after she held for two hours with the IRS and he cannot take that credit and she can’t “give” it to him. It doesn’t work that way. So I learned something in the process. The only person that can take the credit is the person that the children lived with at least 6 months plus one day. That was her. Children whom you don’t take deductions for can still be qualifying children on the EIC. The main factor on determining who gets to take the credit is based on the residency requirement. The IRS told her that those things are not outlined in divorce decrees because they are based on the filers income and the physical residency of the child and have nothing to do with who claims who as a dependent.</p>
<p>I suspect that even if she is entitled to the money, as you state in the post above, she will not get it anytime soon. If there is an IRS office near her, she may be better off meeting with someone in person. If she still has a lawyer, perhaps s/he can send a letter to her ex explaining the situation and how she is contesting the ex’s EIC claim. It may prod the ex into amending his return, but still she shouldn’t plan on seeing that extra money anytime soon.</p>
<p>Happens all the time. She’ll get it if she files a paper return, although it will probably take 6-8 weeks to process the refund. The only way around this in future years is to e-file ASAP in January. First person to the system is going to get it.</p>
<p>With either dependency or EIC duplications, both parties will receive a letter several months later saying it was double claimed. Every letter I’ve seen says if you were the correct person, do nothing; if you were not, file an amended return. I haven’t seen the IRS pursue it after that, but in these circumstances, I had the client who was properly claiming the items.</p>
<p>The IRS is very involved in trying to combat EIC fraud because it’s a huge issue.</p>
<p>Depends if he also used the dependent for EIC and then the amount of EIC would depend on his income. From OPs post, it appears the return was rejected because he used the child for EIC. If he had used the child only for dependency, the friend’s return wouldn’t have rejected. EIC is not dependent on having the dependency exemption.</p>
<p>He probably did get the EIC, though possibly not that much. I recommend that she file with the one she is allowed to claim, then send in an amendment with both kids for EIC. Attach the documentation (school records showing home address, etc). The IRS can then disallow the father the money (though they rarely actually take the step of making him ineligible to claim EIC for 3+ years. Be aware that this happens all the time, and most of the time the IRS doesn’t go after the person that files that way (even if they do it for several years). File early.</p>