Yikes. Our oldest is about to graduate. At Thanksgiving we signed over the title to her car, and she changed her license, insurance… to the state she goes to school in and will stay in after graduation. No kid should be using their parent’s address as their legal domicile unless they live there or they are still in college. Heck, I changed my address even when I was in college on my license every time I moved apartments (still in the same state as my parents).
My kids work in a different state than their residence. We have to file non resident in that state and then file in the state of residence. Your daughter is very lucky the IRS has been overwhelmed lately. She could get in big trouble for this.