Have a client give me a call this afternoon - her husband and she separated in the beginning of 2006, but lived together with one child through all of 2005. He called her to tell her that he has already filed his tax return claiming the child and all mortgage interest and taxes. He is still living in their house so received all the mortgage interest statements. He will not give her any information she needs to file a MFS tax return. I know that if the child lives with both parents for the same amount of time, the parent who had the higher AGI would be eligible for the dependency deduction. However, I was uncertain as to the community property laws as it states that in community property states, each parent on a separate return is treated as having provided exactly one-half of the child's support, regardless of who actually paid it. How would it be determined who gets to claim child in this circumstance? They live in California, which is a community property state. All income and deductions should have been divided equally, but was not done that way. What would be your recommendations??
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peggysioux -
She can file
She can file claiming the kids. With luck, he was lying and hasn't actually filed yet. Whether he has or not, they will both get letters requiring him to prove why he he has the right to claim the kids. (Prove it to the IRS; the spouse won't get any info that way.)
For the community income, be sure to allocate half of her income to him. If he refuses to cooperate, she can ignore his income that would otherwise be allocated to herself.
Games like this can backfire, however. She should get advice before doing these things.
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