Potential Ugly One Brewing

[AZ-Tax]

TP filed MFJ in 2007 tax year but for some reason father in law claimed TP's 2 children as dependents. Father in law in no way shape or form supported the 2 children. To escalate this further, TP is divorcing his spouse. Does the TP file a 2007 amended return claiming his 2 children and if so what proof will the IRS require for this TP to show? Also, will the spouse or possibly ex spouse be required to sign the amended return?

[RitaB]

I hate situations like these

Did the kids live with grandpa (father-in-law)? If so, he didn't have to support them, but they (kids) could not have provided over half their own support. (At least I think that's right, but you never know at this point in the season.) Course, if they were qualifying children of the parents... yeah, I think you can remove the word "potential" from your title...

If your clients amend to claim kids, no proof is required with the return, but IRS may (should, but they have other fish to fry...) contact them later. Yes, spouse on the 2007 return has to sign.

[AZ-Tax]

Kids did not live with father in law..

Wow, what are the chances of the TP's spouse signing an amended tax return which in turn will result in additional taxes and interest for the spouse's father especially since the spouse is divorcing the TP?. I would say slim to none but is what the father in law did legal with the IRS?

[Burke]

No, of course not. But what happened with the original 2007 MFJ return? Did he sign a return where the children were not claimed by the parents? If so, he has a problem. If the children were also claimed on the MFJ return, but the FIL got his in first, he is in a better position.

[Lion]

Both Spouses

Obviously, both spouses were content with FIL claiming kids on his return when it happened, since parents did NOT claim them at that time. Don't get in the middle during a divorce. How can you advise one spouse on amending 2007 if not in the best interests, financially or due to blood ties, of other spouse? Choose one or the other or neither. Let the lawyers who get paid more than we do negotiate current and past tax filing statuses, custodial issues, etc.

[AZ-Tax]

Believe me I prefer not to be involved....

According to the TP, the FIL took his 2 kids as dependents without his knowledge and only discovered it when the TP tried to file his tax return or so that is what the TP told me.

I am curious how often does this take place on there.

[Burke]

Ask for a copy of the return and the signature documents. If he filed and did not claim them originally, then he might as well forget it now. Unless he wants to stir up a big stew pot with the IRS and ex-in-laws.