Dependency Policing?

[AZ-Tax]

I have a client who lives with her parents and earned a W-2 wage in 2007. She wants to me to amend her 2007 tax return and claim herself opposed to having her clients claim her. Her parents were not pleased and told me they supported her most of the 2007 year. What to do?

Has anyone ever had a client/TP get questioned by the IRS for claiming a dependent(s) for which the IRS wanted proof the client/TP supported that dependent(s)?

Or does the IRS figure someone is entitled to claiming this dependent.

[DaveO]

Do you do the parents return? I would work through a support worksheet with her and she if she really is supporting herself.

Having to play the middle in a divorce is bad enough we shouldn't have to do general family counseling as well.

[fliszt]

You've got a

tough situation there. Were the parents and your current client both clients? Or else how did you find out the parents what the parents told you?
I guess I'd start with the current "child" client asking for some dollar numbers on how she is calculating her own self support. And then how many months the client lived w/parents. What are the parents or client figuring "apartment" costs. Food costs. Utilities. School costs. etc. And then do the same with the other client providing "the other" is a client. Otherwise how did you come into contact with both.
Take a look at TTB starting pg 3-14. And perhaps show TTB to your client(s). You could even read certain sections to them.
Larry

[erchess]

Of Course

Depending on what the numbers for her age and income are you may be able to show very quickly that she made far too much money to legally be a dependent even though she made no where near enough to support herself decently without being on the dole for which she might not even qualify if she lived alone.

Be sure to use the rules for 2007 because things do change.

[JohnH]

I'd also tell her that it's going to cost money for me to work through the dependency worksheet, even if we discover she can't claim herself. Payable in advance.

Spoiled, ungrateful children have a high probablity of being problematic, ungrateful clients as well.

[erchess]

Different take than John H

If I did the 07 return for money I wouldn't charge her for discussing an amend including filling out any worksheets that needed filling out as part of the process. I would of course charge her if we decided to amend and the amount of the charge would be affected by whether I perceived that I made any mistake in interviewing her for and preparing the original and on whether for example I had given her a discount in 07 for being as I thought then properly the dependent of a parent who paid full fee. In the latter case I would "chargeback" that discount even if I didn't charge any more due to some error of mine.

Of course if I didn't prepare the 07 for money then I would charge for more than a very few minutes of time and I would want to be paid at the end of each session with her.