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Tax Return for an Incarcerated Person

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    #1

    Tax Return for an Incarcerated Person

    I have a situation where in the past I did a married joint tax return with one toddler child.
    At end of 2006, husband wound up in trouble and in early '07 wound up in jail. The '06 return will be a married filing separately.
    Husband worked all year, wife never worked during the year so she has no income. The home and mortgage are only in the husband's name. Wife took son and moved out of state. Can't get in touch with wife. No forwarding address, phone #, etc.
    Husband has a person acting on his behalf and I have a signed and notarized copy of a general power of attorney.
    In order to claim the son as a dependent, do I need to see some legal document?
    The pending divorce has not been settled to date.
    Uncle Sam, CPA, EA. ARA, NTPI Fellow
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    #2
    You didn't indicate if the husband supported the child more than half the year. This allows him to claim the exemption. The only option is to file MFS. If the spouse didn't work then you have no income to report for her.

    Comment

      #3
      Originally posted by Uncle Sam View Post
      I have a situation where in the past I did a married joint tax return with one toddler child.
      At end of 2006, husband wound up in trouble and in early '07 wound up in jail. The '06 return will be a married filing separately.
      Husband worked all year, wife never worked during the year so she has no income. The home and mortgage are only in the husband's name. Wife took son and moved out of state. Can't get in touch with wife. No forwarding address, phone #, etc.
      Husband has a person acting on his behalf and I have a signed and notarized copy of a general power of attorney.
      In order to claim the son as a dependent, do I need to see some legal document?
      The pending divorce has not been settled to date.
      You do not say if the husband, wife, and child were living together for the full year of 2006. Assuming that the wife did not leave until sometime in 2007, and they all lived together for all of 2006( or the child lived with the father for a longer period of time), than the husband would not need any legal document to claim the child. As long as the child did not provide over half of his/her own support. Father would also win tie breaker based on AGI.

      Comment

        #4
        Tax Return for an Incarcerated Person

        Family lived together for year - everything was normal - until end of year when husband got in trouble.
        He was the financial support of the family, all lived under one roof - dependent child is only 5 years old.
        Uncle Sam, CPA, EA. ARA, NTPI Fellow

        Comment

          #5
          Incarcerated Person

          First let's address his filing status. You say that you can''t find his wife. Is there a lawyer representing him in the divorce? Could this lawyer help you find her and if so is there a case to be made for the proposition that she could benefit by filing jointly with him. Also, is this one of the states I have heard about where a decree of separation allows the taxpayers to consider themselves single, and if so, has this criterion been met? (I tend to think not for 06 since I gather they lived together well into December.) So let's assume he is stuck with MFS.

          Remember that a person who is in prison when filing the return or who uses the MFS Status cannot get the EIC. Of course, for all I know he may have been wealthy before prison, and that also would stop EIC.

          Don't forget to report any prison wages even if he does not receive a W-2. Your software vendor can explain how to report these in your package.

          I don't think you need to see anything special to let him claim the child for 06 but obviously you would for 07 so as a tax planning issue figure on not claiming the child for 07 and beyond even if he has to pay child support.

          Comment

            #6
            Tax Return for an Incarcerated Person

            The client committed the crime just after Christmas '06 - so he didn't actually land in jail until '07.
            His AGI for '06 was slightly above $ 50,000 - so he's way above the limit for getting EIC.
            His rep told me she doesn't have a contact for the wife. Possibly, it's because they DON'T WANT ME to know how to contact her.
            But I really don't wish to get further involved with this more than I need to. If the wife, who I previously dealt with in getting the tax returns done, hasn't contacted me by now, I can only assume she'd rather not contact me at all. I don't wish to pursue it. A MFJ is out of the question.
            Uncle Sam, CPA, EA. ARA, NTPI Fellow

            Comment

              #7
              Read a recent tax court case

              Where a mom committed murder and was incarcerated Jun 5th of the tax year pending her trial. She filed hoh and eic for that year which the service denied.

              Guess what the outcome was.

              Comment

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