Contest Filing of Wife's Return

[Taxadvisor VA]

Client contacted me to prepare his 2012 return. Previously, I have filed his returns MFJ for the past several years. Unfortunately, he and his wife are not getting along. He moved out 11.0.12 and asked me the best route to take to file this year. I told him MFJ b/c he is the primary provider of 4 kids, there is little time for his wife to work. Today, he calls me and says she already filed and claimed EIC. It does appear that she wasn't totally truthful with the person she hired b/c she can't claim HOH (He lived there for most of the 2nd half of last year) and if she filed MFS, EIC would not be an option.

What can he do to contest this erroneous filing by his wife?

1) I would like to amend her return and file MFJ with my client. Since their appears to be quite a bit of tension, I don't think this is viable.

Any suggestions would be helpful.

Thanks,

Taxadvisor VA

[Bees Knees]

For starters, you do not contact her and try to tell her to file MFJ with her husband. That would be a conflict of interest. She may very well be better off MFS, even if she cannot claim EIC. So if you try to convince her to file joint and thus become your client as well, you have a conflict of interest because you are not looking out for her best interest.

I agree it is in the best interest of your client (the husband) to file MFJ, but that is not the issue. The issue is whether you are going to try to represent the best interest for both husband and wife, which you can't.

The only thing you can do is tell the husband to tell her she filed an erroneous return and that she needs to have her tax preparer amend the return to correct the error. You can then file MFS, have husband claim all itemized deductions (forcing her to itemize MFS), and also claim all the kids as the primary provider. Then when IRS denies the exemptions (because she already filed), write a letter of explanation to IRS saying husband lived in the home for more than half the year. IRS will then deny her EIC and HOH claims. Have the husband tell her this is how he is going to file and that she better tell her tax return preparer about it before IRS goes after her. If she does tell her tax preparer, he/she might advise her to amend and file MFJ. But you have to let her tax preparer do the advising. You can't be the one to tell her what to do.

[BP.]

file MFS, have husband claim all the kids as the primary provider. . . husband lived in the home for more than half the year.

Mom might win tie breaker as custodial, based on number of nights- longer period of time. Pub 17, p. 28. TTB 3-18. (No HOH/EIC)

[Taxadvisor VA]

Bees Knees

Thank you very much for taking the time to respond. I agree with what you said as it seems you have traveled down this road before.

Best Regards,

Taxadvisor VA

For starters, you do not contact her and try to tell her to file MFJ with her husband. That would be a conflict of interest. She may very well be better off MFS, even if she cannot claim EIC. So if you try to convince her to file joint and thus become your client as well, you have a conflict of interest because you are not looking out for her best interest.

I agree it is in the best interest of your client (the husband) to file MFJ, but that is not the issue. The issue is whether you are going to try to represent the best interest for both husband and wife, which you can't.

The only thing you can do is tell the husband to tell her she filed an erroneous return and that she needs to have her tax preparer amend the return to correct the error. You can then file MFS, have husband claim all itemized deductions (forcing her to itemize MFS), and also claim all the kids as the primary provider. Then when IRS denies the exemptions (because she already filed), write a letter of explanation to IRS saying husband lived in the home for more than half the year. IRS will then deny her EIC and HOH claims. Have the husband tell her this is how he is going to file and that she better tell her tax return preparer about it before IRS goes after her. If she does tell her tax preparer, he/she might advise her to amend and file MFJ. But you have to let her tax preparer do the advising. You can't be the one to tell her what to do.

[taxea]

Client contacted me to prepare his 2012 return. Previously, I have filed his returns MFJ for the past several years. Unfortunately, he and his wife are not getting along. He moved out 11.0.12 and asked me the best route to take to file this year. I told him MFJ b/c he is the primary provider of 4 kids, there is little time for his wife to work. Today, he calls me and says she already filed and claimed EIC. It does appear that she wasn't totally truthful with the person she hired b/c she can't claim HOH (He lived there for most of the 2nd half of last year) and if she filed MFS, EIC would not be an option.

What can he do to contest this erroneous filing by his wife?

1) I would like to amend her return and file MFJ with my client. Since their appears to be quite a bit of tension, I don't think this is viable.

Any suggestions would be helpful.

Thanks,

Taxadvisor VA

The first thing you have to deal with is the dependents issue. Was there a court separation document at the time he moved out? If not, legally they are still married. If you can prove that he provided more than 1/2 the care of the children and they did live with him for more than half the year, he can claim the children. Paper file his return including the Preparer required form and a very detailed explanation. Do not include heresay from the husband. Make sure you include facts and documents or even a statement of circumstances from him. This way the IRS will contact both of them and will make a determination as to whether her return is inaccurate.


What the X did is totally beyond your control unless you have actually seen a copy of her filing. You can't talk to her and I would not advise that you tell him to have her amend her return. He can ask which filing status she used because if she filed MFS he would have to do the same. It doesn't seem likely that she would sign an MFJ return with him however, she may have filed one without his signature. Likewise, he cannot file MFJ without hers. You have no choice other than to file him MFS. When you go to efile the return you will know that she filed MFJ if it gets rejected. If it doesn't reject she filed MFS.

[DexEA]

The first thing you have to deal with is the dependents issue. Was there a court separation document at the time he moved out? If not, legally they are still married. If you can prove that he provided more than 1/2 the care of the children and they did live with him for more than half the year, he can claim the children.

Are you sure about that?

[luke]

When you go to efile the return you will know that she filed MFJ if it gets rejected. If it doesn't reject she filed MFS.

OR she erroneously filed HOH like was noted above!
I also disagree that IRS will hold up her HOH/EIC! By the time he files her return may have been processed and her refund on the way! and IRS will NOT try to get EIC refund back from her!

[DaveO]

We would like to think the IRS would go after the offending spouse but in my experience they do nothing. I know of a couple cases whre both parents get all the benefits including HOH and have for years without a peep from the IRS.

[New York Enrolled Agent]

Are you sure about that?

I think Dex and BP are on target.

The original poster doesn't explicitly state all the facts but based on what is written it seems reasonable to infer that the 4 kids are qualifying children. If so, regardless of the amount of support, it appears Mom gets the exemptions. The issue of HOH filing status appears incorrect but the assertion by some posters that the father's providing more than half the support equals the ability to take the exemptions is IMO not accurate.

Reg §1.152-4(d)
(d) Custodial parent


(1) In general.
The custodial parent is the parent with whom the child resides for the greater number of nights during the calendar year, and the noncustodial parent is the parent who is not the custodial parent. A child is treated as residing with neither parent if the child is emancipated under state law.

[Gary2]

I think Dex and BP are on target.

The original poster doesn't explicitly state all the facts but based on what is written it seems reasonable to infer that the 4 kids are qualifying children. If so, regardless of the amount of support, it appears Mom gets the exemptions. The issue of HOH filing status appears incorrect but the assertion by some posters that the father's providing more than half the support equals the ability to take the exemptions is IMO not accurate.

In this case, because they both meet the residency requirement, Mom will get the exemptions if she claims them; she wins the tiebreaker. However, if she doesn't claim them, Dad is still entitled to claim them. It would not be a fraudulent return to claim them, but he might want to make sure he's paid up for what he'd owe if they're all denied, so that he doesn't get hit with late payment or other penalties.

But the real answer is to let the divorce lawyer handle it. While you can't get to Mom's return, the lawyer might be able to. And filing an erroneous return for EIC is a pretty big item to hold over her.

[Roland Slugg]

Unless you have spoken with the W or seen her 2012 return, you don't really know anything about her return, including filing status, the claiming (or not claiming) of an EITC and/or exemptions for the children. In fact, unless you are especially close to the H, you really don't even know when he moved out of the house. Perhaps it was on 11.0.12 as you said (a date I can not find on my calendar), but maybe it was earlier ... 1.10.12, say. Everything the H has told you is really heresay.

If these were my clients, I would explain to the H that he has two filing options: MFJ, if his W will agree, or MFS if she won't. If H and W both have lawyers, I would suggest to H that he ask his lawyer to ask W's lawyer if the parties could agree to file a joint return for 2012. If the parties do not have lawyers, I would ask H to either, (A) contact his W and ask her to call me, or (B) allow me to call W myself. If and when I did talk with W, I would let her know that I would appreciate her confirming for me if she has, in fact, already filed her 2012 returns, and if so, if she would tell me what filing status she used. I would also ask if she could let me know which of the four chgildren she claimed as dependents on her own return. If a conversation with W does take place, I would NOT say anything about the EITC, because under all circumstances it is irrelevant to me. If, during this possible conversation, she tells me that she did already file her own return, I would NOT say anything about MFJ being a better option ... unless she asks, which she probably won't. If she does, however, I would let her know that a single MFJ return, with her and her H, would almost surely result in less tax for her and H combined than the total tax paid by both of them separately. If I do talk with W, it will simply be for the purpose of seeking information, not to disseminate information, and I would follow the discussion with a written memo for my file, a copy of which would be sent to the H and, perhaps, a copy sent to the W as well.

If I am unable to speak with the W, or if I do and she confirms that she has filed her own return, I will then advise H that unless he can get W to sign a MFJ engagement letter, that my only option will be to prepare a MFS return for him alone. I would also let him know that the return filing options is a matter that would be good for the lawyers to work out before any decision is made.

Finally, if he wants a MFS return, or if that is the only remaining option, I would not list any of the four children as dependents on his return. That's because he moved out of the family home at some point during the year, and, I assume, the W and all the children remained living in it. Thus, the W was the custodial parent for all 12 months of the year and is entitled to claim them if H and W file separate returns.

CLARIFICATION ADDED 2/23/2103:

The above comment about the W being entitled to claim all four children is true but may be misleading. If the H lived in the family home for more than half the year, then he, too, qualifies to claim them on his return if he and W file separately. This would require the W's consent, however, because each of the children can be claimed on only one of the parents' returns. If BOTH parents claim the children, the IRS (according to its own published rules) will allow the dependent exemptions only on the return of the parent the children lived with for the longer period of time. Based on the facts in the OP, that would be the W. The W can transfer one or more of the children's exemptions to the H by simply not claiming them on her return. Hopefully the parents can agree on this between themselves or with the help of their lawyers.

[taxea]

Are you sure about that?

the kids lived with him more than 1/2 the year, if he can prove he provided more than half of their support (including the short time he didn't live there) I would consider it a possibility

OR she erroneously filed HOH like was noted above!
I also disagree that IRS will hold up her HOH/EIC! By the time he files her return may have been processed and her refund on the way! and IRS will NOT try to get EIC refund back from her!

We would like to think the IRS would go after the offending spouse but in my experience they do nothing. I know of a couple cases whre both parents get all the benefits including HOH and have for years without a peep from the IRS.

That may be true but with all the fraud going on, I bet the IRS changes its tune. I can see them going after her.

[Lion]

He doesn't have to provide more than half the kids' support. The kids cannot provide more than half their own support.

[taxea]

He doesn't have to provide more than half the kids' support. The kids cannot provide more than half their own support.

I was thinking more as between he and the spouse, not the kids

[DexEA]

You can't look at only 1/2 the year.....

I think Dex and BP are on target.

The original poster doesn't explicitly state all the facts but based on what is written it seems reasonable to infer that the 4 kids are qualifying children. If so, regardless of the amount of support, it appears Mom gets the exemptions. The issue of HOH filing status appears incorrect but the assertion by some posters that the father's providing more than half the support equals the ability to take the exemptions is IMO not accurate.

Reg §1.152-4(d)
(d) Custodial parent


(1) In general.
The custodial parent is the parent with whom the child resides for the greater number of nights during the calendar year, and the noncustodial parent is the parent who is not the custodial parent. A child is treated as residing with neither parent if the child is emancipated under state law.

As New York Enrolled Agent pointed out, the custodial parent is the parent wit whom the child resides for the greater number of nights. If he can prove he provided more than half of their support doesn't matter either, as long as each kid did not provide more than 1/2 of their own support, as Lion pointed out. How can you consider it a possibility?

the kids lived with him more than 1/2 the year, if he can prove he provided more than half of their support (including the short time he didn't live there) I would consider it a possibility