Hot (dependent of the military type) potato issue

[FEDUKE404]

Single mom has previously been (legitimately) claimed as a dependent by parent.

Her young child has been claimed by the grandparents for several years. Everything there seems legit based upon available facts, as the child lived exclusively in their home. Temporary absences were de minimis.

During 2010, mom went from being college student/graduate to member of military in early fall. There was also 2010 wage income prior to active duty from working in a restaurant.

Child does NOT live with mom, although child will do so eventually perhaps later this year when duty station issues have been settled.

Mom wishes to claim child as her own dependent for calendar year 2010. Although likely not paying half of total support, no one will challenge her on that matter. Worst case scenario, a multiple support declaration could likely appear with same end result.

IMPORTANT: Mom states that to get specific (current) military benefits, she MUST show child as a dependent on her 2010 income tax return. (I think this is associated with something that is not housing related??)

Question #1: Is this going to fly (dependency issue only)? The head of household issue is obviously off of the table for 2010.

Question #2: How does all of this fit into potentially claiming EITC (and other related issues) for the child?

Question #3: Is she facing a similar scenario for 2011 assuming the child does not actually begin living in mom's residence prior to the fall?

Thanks for all input, especially from anyone who has specifically dealt with military filers who may be in a similar situation. These scenarios are the type that get my eyes rolling, especially in early January.

FE

[appelman]

She is not a qualifying child of her mother...

because they did not live together more than half the year. If she meets the requirements of being a qualifying child of her grandmother, which it sounds as though she may, she cannot be a qualifying relative of her mother. If she is neither a qualifying child nor a qualifying relative of her mother, I don't see how her mother can legitimately claim her.

[BP.]

Child does NOT live with mom,

Did mom & child live together at all in 2010? You mentioned mom had not entered military until the fall.

[FEDUKE404]

Additional info

Did mom & child live together at all in 2010? You mentioned mom had not entered military until the fall.

Child has lived with grandparents exclusively. Mom, for some time, has been paying a fixed monthly payment (plus irregular add-ons) to grandparents for their services and/or support. Father may have been doing something similar??

Otherwise, mom has been in college dorm and/or own her apartment elsewhere.

FE

[BP.]

Child has lived with grandparents exclusively.

FE

Then, appelman's got the answer.

[FEDUKE404]

One more possibility

Thanks for the input.

Does anyone care to tackle the "temporary absence" exceptions ("your child is considered to have lived with you.....") as explained in the right-hand column on Page 11 of IRS Publication 501? ( http://www.irs.gov/pub/irs-pdf/p501.pdf )

The example at hand DOES include several months of college absence, and later several months of active (and current) military service.

I think the goal is to clear the child as a "qualifying child" and/or be able to use EITC.

From the feedback I am receiving, such is a fairly common practice for those in the military. That is one reason I was hoping to hear from a tax person who, due to preparing a large number of military tax returns, might have some additional insight.

I guess I could always defer to having folks on base prepare the "free" tax returns for members of the military, but there are a couple of other non-dependent issues that will be part of the tax return that might make that a potentially unwise decision - I don't really know the overall skill levels of those involved.

Thanks once again!

FE

[BP.]

Does anyone care to tackle the "temporary absence" exceptions

I had considered and then discarded the "temporary absence" issue because of this info you provided:

Child has lived with grandparents exclusively . . . mom has been in college dorm and/or her own apartment elsewhere.

[FEDUKE404]

Necessary clarification

I had considered and then discarded the "temporary absence" issue because of this info you provided: "Child has lived with grandparents exclusively . . . mom has been in college dorm and/or her own apartment elsewhere."

I should have spoken more clearly:

"Child has lived with grandparents exclusively . . . mom has been in college dorm and/or her own COLLEGE apartment elsewhere." (Like many college students, apparently she suffered from dorm-itis? )

Up until 2010, mother has (legitimately) been claimed as a dependent by her own parents who do not maintain custody of grandchild. So far as I know, the other grandparents have (should have!) been claiming the grandchild as a dependent. Mom has for some time been paying a fixed monthly rate to said grandparents, in addition to paying other separate support expenses.

FE

[Nashville]

Implicit Residency

I wouldn't discard the idea of "temporary living" just yet, but would rather know more. I think a court case, if one exists, would be most reliable.

I believe IRS could defeat the issue of "temporary living" based on their own interpretation of the facts. However, IRS does not want to breach the will of Congress, and there is ample precedent where the concept of "temporary living" has been stretched to encompass many situations.

The key to the mother's argument could very well be that there has never been an intention for grandparents to tend to the child forever. I have seen this work in a situation where a drug-addicted child was in a state facility/halfway house for four years, and the mother claimed "temporary living." The child eventually came home to live with her. Although mother could not claim child as dependent because of state support, DID claim residency for EIC. IRS consented.

This may be a situation where you can't find concurrence with any citation, but you can perhaps plow new ground with already-existing interpretations of "temporary living." Additionally, Congress is very supportive of military, and part of this support rubs off on IRS. Maybe look for a relevant court case.