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Multiple Households at one address

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    Multiple Households at one address

    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.

    #2
    Originally posted by erchess View Post
    Years ago I was told that although it is rare, it is possible for one house to contain more than one household.
    This is a headnote from SCA 1998-041

    The Service has made available Significant Service Center Advice on whether two unmarried individuals, each with their own dependent children, living in one house may both claim head of household (HOH) status. Both individuals could claim HOH status, the Service says, if they meet the reg. section 1.2-2(d) test of providing more than one- half of the cost of maintaining their respective households, regardless of the shared physical space.

    If you google, I think you can find the entire document.

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      #3
      Multiple households in one structure

      There was a lengthy and rather contentious debate about this very question in a thread from last week. Jesse posted a link to SCA 1998-041, which is the document cited by New York Enrolled Agent:



      Here's the link to the original thread on this message board:

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      The guidance in SCA 1998-041 is pretty clear, and it doesn't say anything about separate keys or separate entrances. But you gotta read the whole thing.

      And I don't whether SCA 1998-041 has somehow been rendered obsolete by more recent case law.

      BMK
      Burton M. Koss
      koss@usakoss.net

      ____________________________________
      The map is not the territory...
      and the instruction book is not the process.

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