Years ago I was told that although it is rare, it is possible for one house to contain more than one household. I was told that the IRS looks for such things as separate entrances with different keys and for any doors between the sections of the house to be lockable but that even absent this they will go along if there are such things as separate refrigerators or sections of the one refrigerator or simple labeling of items in the fridge as to their ownership, and of course separate finances.
I would like to hear from anyone who thinks this has always been wrong or has changed or in the alternative from anyone who concurs.
I will say that when I have explained the rules above to all of the actual clients who have come to me, only one client has claimed to meet the standard. This was a woman who had a child but she lived with her mother and some dependent of the mother who was not a dependent of my client. She told me that the house had separate entrances with different keys, that the doors between the two parts of the house could be locked from either side, and that there were separate complete kitchens. I filed her as HH even though my computer warned me that her mother had claimed HH at the same mailing address. Given the way things work at that firm it is not surprising that I have no idea whether or with what outcome the return was audited. I would only have heard if the return had been audited and the representative handling the audit felt, and the District Manager agreed, that I had massively screwed up. Since I documented what I did and what I was told and since believing the client's story should per company policy have led me to do as I did, there was no way I was going to hear about any trouble.
I would like to hear from anyone who thinks this has always been wrong or has changed or in the alternative from anyone who concurs.
I will say that when I have explained the rules above to all of the actual clients who have come to me, only one client has claimed to meet the standard. This was a woman who had a child but she lived with her mother and some dependent of the mother who was not a dependent of my client. She told me that the house had separate entrances with different keys, that the doors between the two parts of the house could be locked from either side, and that there were separate complete kitchens. I filed her as HH even though my computer warned me that her mother had claimed HH at the same mailing address. Given the way things work at that firm it is not surprising that I have no idea whether or with what outcome the return was audited. I would only have heard if the return had been audited and the representative handling the audit felt, and the District Manager agreed, that I had massively screwed up. Since I documented what I did and what I was told and since believing the client's story should per company policy have led me to do as I did, there was no way I was going to hear about any trouble.
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