IRS gave the daughter an exemption?

[tacks]

I filed a return for a client's daughter -- she, ther daughter, was a full time student. The daughter did not claim an exemption for herself. Her parents did.

I just got off the phone with the IRS. They, the IRS, adjusted the return to include an exemption for the daughter. What the heck? I've never heard of such a thing. The IRS adds an exemption to a return when the client doesn't claim it?

The IRS claimed that the daughter got a bigger refund and a notice explaining the change -- which i believe.

Did anyone ever get something like this? I will, of course, ask the client to look for any notice that the daughter received. But i just find this odd.

The only thing quirky about this is that the daughter didn't claim herself in the prior year because she made too much money. Not sure if that has anything to do with it.

[erchess]

Possible Typo?

Did you perhaps mean to day that the daughter DID claim herself the year before because she made too much money to be a dependent?

I have not heard of this particular issue being wrongly corrected but I am sure we all know that in the past a lot of people were given the Earned Income Credit when they had not claimed it. That happened so much with so much grief for everyone that the IRS started the habit of having us print "No" on the EIC line of page two of 1040 or 1040A if we were intentionally not claiming the credit.

[David1980]

I've seen this happen where the exemption amount was omitted from the return, but the checkbox that you can claim yourself was still checked. It was a software glitch when I saw it - but I could also see someone keying in a paper filed return wrong at the IRS end. Was it paper filed?

[tacks]

Thanks for reading and responding.

Did you perhaps mean to day that the daughter DID claim herself the year before because she made too much money to be a dependent?

Ooops. You're exactly correct. I meant that the PARENTS could not claim the daughter in the prior year because the daughter made too much money.

[tacks]

Hey David,
Yes it was paper filed. And that was my initial thought. A data entry mistake on the part of the IRS.

But the odd thing was the IRS had my original numbers before their adjustment. The IRS had my bottom line 'amount to be refunded' matched.

I'm anxious to see the IRS notices sent with this.

[tacks]

Well first off thanks again to David and Erchess for responding. Getting feedback like that is invaluable to me.

I went back and forth with the IRS help line. I recreated the return after their adjustment. It's a data entry error on their part.

Reason for adjustment, per IRS help, the code says either...

1 the exemption amount was incorrect

OR

2 the exemption amount was blank


As we did NOT claim an exemption for herself the amount SHOULD have been blank. My software wouldn't allow me to print a return with such an error on it. Data entry error by the IRS.

[Edsel]

Bizarre Credit

I think the whole thing is an electronic program by the IRS to identify people who should have got the $300 credit but didn't. In the process they've dropped the ball in their haste and waste to assure everyone's $300 credit is maximized. Even if dependency status is sacrificed on the altar of haste and waste.

When presidential/congressional directives are involved with stimulous credits, the IRS gets a fire lit under it through the Dept of Treasury.

I had this happen to one of my clients as well.

[tacks]

Thanks for replying, Edsel. Your explanation is consistent with everything that i've seen in my client's situation.

How did you correct the problem? I filed an amended return. (But i felt like telling the IRS to go and fix it themselves!)

My client took my suggestion on how we best fix it. He said he was doing it because he didn't want his student/daughter to have any problems with the IRS. But he said that if it were him he'd just tell the IRS to go %@#& themselves.

[Mike Mac]

Just had one of these

Strange.

A client just stopped by yesterday with a CP87B Notice to his son (client got one also) stating that two people both claimed the son's SSN. Son originally filed a 1040EZ correctly NOT claiming himself. In Mar the IRS sent son an CP12R notice saying that THEY had computed line 9 of the 1040EZ and gave him an extra $300 recovery rebate (the son had paper-filed the original return as well). The son just figured he did something wrong and happily spent the extra money.

I plan to respond to the CP notice of the son's with a letter stating that the son did not claim himself (with a copy of the original 1040EZ attached) with the son stating that the father properly took the exemption. We will see if the IRS will send the next logical letter and ask for the $300 back that was sent due to their programming or key punch error.