Claiming Children

[rwm221]

I had a client that has been divorced for over 10 years, but he and his ex-wife still live together. She got her license to be a foster parent and has 3 foster children. She then adopted 2 more children. She does not work. When my client came in to file his taxes he brought in the adoption papers and the foster care papers. His ex-wife is listed on all the paper work, but he is not listed anywhere. In my opinion the children have a relationship with her, but not him because they are not married. I put them on the tax return as other dependents not children. Client was not happy, went to H&R Block. Person there said I was wrong and put the children on as children. He is now getting over $10,000 back. Was I wrong?

[Lion]

To your client, the children can NOT be Qualified Children, because they do NOT meet the relationship test to him. They could be Qualified Relatives, IF they meet ALL the tests. No EIC or CTC or HOH. TTB 3-12.

https://apps.irs.gov/app/vita/content/globalmedia/overview_of_the_rules_for_claiming_4012.pdf

[Uncle Sam]

Don't understand something. Even if the ex-spouses live in same home, but ex-wife is supposed to claim the children as she is supposed to be supporting them and establishes a living relationship with them, how can HE (your client) claim the ex-wife's children as HIS dependents?

[TaxGuyBill]

The adoption was done AFTER divorce?

[Lion]

If they meet ALL the requirements to be Qualified Relatives...

[rwm221]

The adoption happened last year and they have been divorced for 10 years. When I worked with him I put as single and the children and ex wife as Other Dependents. He left and went to Block, they said I did it wrong and changed it to children.

Thank You for the responses.

[Uncle Sam]

The whole case as you described it doesn't make sense. How can a woman who has no job to support the children get adoption of children rights? Is she on some government public assistance program?
Which ex-spouse owns the home? Whose name is on the real estate tax bills, mortgage (if any)? What about adopted childrens' health insurance policies and school records? Who is the parent shown on those statements?
I am not concerned with what the Block-heads did.

[Rapid Robert]

"How can a woman who has no job to support the children get adoption of children rights?"

Just guessing -- maybe it is the children who receive government support?

"went to Block, they said I did it wrong and changed it to children"

So much for paid preparer due diligence...

How was the prior year return prepared for the ex-husband? Maybe this has been going on for a while.

[rwm221]

He owns the house; he has Medicare insurance. The children either have state insurance or none at all. I think that when the children were adopted, they used household income which included his income. But, he is not on the adoption papers as the person adopting the children just his ex wife. I am not sure what state benefits. She has.

[Uncle Sam]

" I think that when the children were adopted, they used household income which included his income" - That's fraudulent because they made an assumption on the application that it would be a MFJ return.
Prior year return wouldn't have had the children involved as the adoption took place in 2023. Also, WHAT DATE during 2023 were the adoptions effective?
Children may have not been in the home for more than 6 months.
Also - isn't it mandatory that the children have SOME form of health insurance? What about Foster Care reimbursements to mother?

[Lion]

Wait a minute, the adoption was during 2023?! When did the children begin living in the home that is the ex's? I know that children can be placed in a home prior to adoption, but when did these children start living in ex's home? To be Qualifying Relatives of the ex, they must live in his home for the FULL year when they aren't related to the ex. And, meet the other qualifications to be a QR of the ex. Do they meet ALL 4 tests for the ex, or not?

[Uncle Sam]

Post # 6 states "The adoption happened last year"

[FEDUKE404]

One would think the Forms 8867 for this couple might be. . .interesting.

[Lion]

Post # 6 states "The adoption happened last year"

So you understand that my Post # 5 didn't address the possibility that the children might not have lived with the ex the full year (focusing on the divorce over 10 years ago, thinking the kids had been around much longer than part-year). Post # 6 added new information. Therefore, my Post # 11. But, we still don't know if the adopted children moved into the home after the adoption or were placed early enough to be there the full year.

[Uncle Sam]

And we also don't know whether or not any of the adoption expenses even qualified for Adoption Credit, even if not claimed, for whatever reason.