Guardian grandparents & mother both claim child

[numberkruncher]

Please give me some advice.

Grandparents have legal guardianship of grandchild until age 18. Child has lived with them full time since 2005 and is now 9 years old. They've claimed the child on their tax return for past 3 years.

Child's mother released from prison in June 2008 and moved in with the guardians, her parents.

Mother is planning to file a tax return and claim child as dependent.

I see from tiebreaker rules that the IRS will award dependent to parent over non-parent. So, does the guardianship trump parent? The guardians pay 100% of cost of home and support of child and have highest AGI.

Thanks for your opinions and experience.

[powerage]

I vote grandparents

I would say the grandparents could only claim the child, just based on the fact of legal guardianship.

[solomon]

§152(c)(4)(A)(B)

(A) In general
Except as provided in subparagraph (B), if (but for this paragraph) an individual may be and is claimed as a qualifying child by 2 or more taxpayers for a taxable year beginning in the same calendar year, such individual shall be treated as the qualifying child of the taxpayer who is—

(i) a parent of the individual, or

(ii) if clause (i) does not apply, the taxpayer with the highest adjusted gross income for such taxable year.

(B) More than 1 parent claiming qualifying child
If the parents claiming any qualifying child do not file a joint return together, such child shall be treated as the qualifying child of—

(i) the parent with whom the child resided for the longest period of time during the taxable year, or

(ii) if the child resides with both parents for the same amount of time during such taxable year, the parent with the highest adjusted gross income.

[David1980]

Fairness rarely is a deciding factor in the tax code. I do believe the mother would win the dependency if they were both to claim the child. Perhaps they can work out an agreement so that the mother doesn't claim the child (offer to pay the mother whatever tax benefit she would have received so that the grandparents can claim the child? Assuming that there is a greater tax benefit for the grandparents.)

[erchess]

Ok

What do these grandparents have to do that they have not done to become for legal purposes the parents of this child?

What does subparagraph B say?

I know this - if I were the grandparents and got denied the tax benefits of this child I would determine who denied me the benefits and leave the child on their doorstep.

For openers I would put my daughter on the street.

[David1980]

solomon quoted section B as well as section A. "(B) More than 1 parent claiming qualifying child..." No help there...

Note that had the mother not lived with the child for at least 6 months of the year there wouldn't be any question (which is why there was no issue when mom was in prison.) If the grandparents wanted to they could simply kick out the mother, and then in future years claim the grandchild (so long as the mother doesn't take the grandchild with her.)

[MLINDER42]

Who Can Claim Child

I have this all the time and try to both returns at same time and see which way the largest refund may be obtained.I would think that the daughter would be eligible for eitc and there fore the refund would be much larger.

[BOB W]

Without doing any research, I thought "providing the most support and time " would be a primary 1st issue.

[DonPriebe]

Without doing any research, I thought "providing the most support and time " would be a primary 1st issue.

Since you don't have to provide ANY support to claim a qualifying child as a dependent, that probably is not the first criterion.

[BOB W]

I love the new dependency rules......... nothing will be the same anymore...............???

[taxea]

Legal guardianship supercedes mom taking the child because, for all intend and purpose, it means that she has given up her parental rights.

If you don't have control over her return and she does claim the kid/s...the IRS will send a letter to both the grandparents and the mother asking for proof of the deduction. The letter says that if the taxpayer rightfully claimed the child they do not need to respond to the letter.

My suggestion is to advise your clients to send a copy of the legal guardianship back to the IRS. You could also attach a statement to the return with the details of the court order but I won't guarantee you that this will keep a letter from coming because this type of comparison is done by computer. IRS employees do not review the actual return in these circumstances.

The mother is obviously trying to defraud the IRS for child credit and EIC. taxea

[OtisMozzetti]

Yah, But.

I have this all the time and try to both returns at same time and see which way the largest refund may be obtained.I would think that the daughter would be eligible for eitc and there fore the refund would be much larger.

It is frequently an admirably thankless chore to find out which way the largest tax benefit occurs. Often daughter X and grandparents YZ can see not much further than their own immediate interest. In any event, it uses up a lot of tax professional's time and causes a lot of uncertainty about whether or not the tax pro will end up with a paid return.

[BOB W]

Since you don't have to provide ANY support to claim a qualifying child as a dependent, that probably is not the first criterion.

I did some research and "Support and Time" are primary. The only thing I left out was Relationship. So I guess I'm back on tract with "Dependency"