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    tunger66's Avatar
    tunger66 Posts: 10, Reputation: 1
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    #21

    Apr 8, 2015, 07:07 AM
    Quote Originally Posted by AK lawyer View Post
    You are trying to compare apples and oranges. You don't qualify (I removed the portion you quoted from one of my earlier posts: I believe I copied the wrong IRS rule.). And the grandparents may qualify under a different provision. If they are using it (and, as I wrote yesterday, you probably will never know if they are), that provision doesn't require that the children live with them at all. Frankly, it is none of your business how they do their taxes.
    I understand the rules state that I do not qualify because the kids spend less than half of the year living with me, but this same condition exist for the Grandparents, so why would it not exclude them from qualifying as well.
    Please help me understand what "Different Provision" would allow them to qualify. Can I apply the same provision to qualify myself?

    I was reading the tie-breaker rule below for when more than one party qualifies and it clearly benefits the "Parent" over another qualifying party. Does the same rule apply if neither party qualifies?:

    Tiebreaker rules. To determine which person can treat the child as a qualifying child to claim these six tax benefits, the following tiebreaker rules apply.
    • If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent.

    ebaines's Avatar
    ebaines Posts: 12,130, Reputation: 1307
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    #22

    Apr 8, 2015, 07:18 AM
    Quote Originally Posted by tunger66 View Post
    Please help me understand what "Different Provision" would allow them to qualify. Can I apply the same provision to qualify myself?
    Please read pages 16-18 of the instructions for Form 1040: http://www.irs.gov/pub/irs-pdf/i1040gi.pdf

    On page 16 you will see why the children are not "qualifying children" for you (because you don't have custody and your ex hasn't signed the waiver described on pages 17 & 18), and on page 17 why your children are not "qualifying relatives" for you (because apparently you don't provide at least half their upkeep).

    If after reading this you still have questions as to why you don't qualify, please ask.
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    tunger66 Posts: 10, Reputation: 1
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    #23

    Apr 8, 2015, 09:43 AM
    Quote Originally Posted by ebaines View Post
    Please read pages 16-18 of the instructions for Form 1040: http://www.irs.gov/pub/irs-pdf/i1040gi.pdf

    On page 16 you will see why the children are not "qualifying children" for you (because you don't have custody and your ex hasn't signed the waiver described on pages 17 & 18), and on page 17 why your children are not "qualifying relatives" for you (because apparently you don't provide at least half their upkeep).

    If after reading this you still have questions as to why you don't qualify, please ask.
    I read all of those pages in detail and have come to the conclusion that only the custodial Parent (mother)technically "qualifies" to claim the children as her dependent because they live with her the majority of the year. Since she is not a taxpayer, the next question is whether the children can be claimed as a "Qualifying relative" by anyone else [i.e. the other parent (OP) or the Grandparent]. It does seem that both the OP and the Grandparent equally meet those conditions. The only gray area there is the condition of providing "over half of his or her support" which has never been documented to determine what amount is "half" and who is exceeding that amount of support.
    Without documentation showing that one party HAS NOT provided over half of their support, then technically both parties can claim to provide over 50% of the children's support thus both parties can claim the children as "qualifying relatives". But only one party can take the credit so the "tie-breakers rules are invoked. The first "tie breaker" rule benefits a Parent over a Non-parent.
    What did I miss?
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    AK lawyer Posts: 12,592, Reputation: 977
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    #24

    Apr 8, 2015, 10:38 AM
    Quote Originally Posted by J_9 View Post
    I'm going to forego the legal lingo for a moment and offer another question...

    Wouldn't it be prudent in this case for the OP (original poster) to return to court so that the court could determine who is able to use the child(ren) as a deduction? This is common in many divorce/custody cases.
    I don't think so. As I detailed in Post # 16, it appears that the courts are no longer given the discretion which they once were in determining who gets the "deduction". And, as I also have suggested, OP doesn't have standing to look into or contest the grandparents' taxes.
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    tunger66 Posts: 10, Reputation: 1
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    #25

    Apr 8, 2015, 11:10 AM
    Quote Originally Posted by AK lawyer View Post
    I don't think so. As I detailed in Post # 16, it appears that the courts are no longer given the discretion which they once were in determining who gets the "deduction". And, as I also have suggested, OP doesn't have standing to look into or contest the grandparents' taxes.
    If both the OP and the Grandparent claim the children as "Qualified Relatives" under the same criteria and conditions on their respective 2014 tax returns:
    1.)How does the IRS determine who to give the credit to?
    A.)Do they assume both parties were correct in their assertion that the criteria was met by both parties and invoke the tie-breaker rules? Or
    B.)require each party to prove they meet each criterion and to provide financial records to determine who(if either/or both) provides over 50% of the children's support?
    2.) What are the penalties and/or risk involved for the OP to claim the children as( and honestly believes they are) Qualified relatives on the 2014 return if:
    a.)the Grandparent makes the same claim?
    b.)it is later determined that the OP provides less than half of the support?
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    ebaines Posts: 12,130, Reputation: 1307
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    #26

    Apr 8, 2015, 11:33 AM
    Quote Originally Posted by tunger66
    The only gray area there is the condition of providing "over half of his or her support" which has never been documented to determine what amount is "half" and who is exceeding that amount of support.
    Indeed all my comments throughout this thread have been based on your statement that you provide no child supoort, just food & shelter 4 months/year. I would suggest reading pages 18 and 19 of Pub 501, which has a more in-depth discussion of how to determine the cost of upkeep. See: http://www.irs.gov/pub/irs-pdf/p501.pdf

    Upkeep includes food, lodging, clothing, education, medical & dental, recreation, transportation, and similar necessities. Note that the value of lodging is determined by the fair market value of the room provided for the child - in other words, even though your ex has no mortgage there is a value to the room she provides, and that value is most likely related to the value of her home.

    Quote Originally Posted by tunger66
    The first "tie breaker" rule benefits a Parent over a Non-parent.
    As I read it the tie breaker applies only to breaking ties for two people who can both claim a child as a "qualifying child." But neither you nor the grandparents can do that - the question is whether the children are your "qualifying relatives," not "qualifying children," and there is a big difference. I don't see any tie breaker rules for qualifying relatives. So it boils down to doing the calculation of (a) the upkeep you provided divided by (b) the total upkeep provided by all parties throughout the year. If that number is greater than 50% then by all means go ahead and claim the children. But be sure to keep notes of yuor calculations so that if you are audited in 2-3 years you can justify your filing.
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    ebaines Posts: 12,130, Reputation: 1307
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    #27

    Apr 8, 2015, 11:45 AM
    Quote Originally Posted by tunger66 View Post
    If both the OP and the Grandparent claim the children as "Qualified Relatives" under the same criteria and conditions on their respective 2014 tax returns:
    1.)How does the IRS determine who to give the credit to?
    They would require both parties to submit evidence of amount of support provided, and then do the math to see whose claim is better.


    Quote Originally Posted by tunger66 View Post
    2.) What are the penalties and/or risk involved for the OP to claim the children as( and honestly believes they are) Qualified relatives on the 2014 return if:
    a.)the Grandparent makes the same claim?
    b.)it is later determined that the OP provides less than half of the support?
    As long as it's clear that fraud is not involved (and here I think there is little risk of that), then if your claim is disallowed you would have to pay the additional taxes due plus a "failure to pay" penalty of 1/2% per month plus interest charges of about 5%/year. For example, if two years from now the IRS disallows your claim and you get socked for $2000 additional taxes owed, you would have to pay $2000 + 12% + 10% = $2440.
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    tunger66 Posts: 10, Reputation: 1
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    #28

    Apr 8, 2015, 12:09 PM
    Quote Originally Posted by ebaines View Post
    Indeed all my comments throughout this thread have been based on your statement that you provide no child supoort, just food & shelter 4 months/year. I would suggest reading pages 18 and 19 of Pub 501, which has a more in-depth discussion of how to determine the cost of upkeep. See: http://www.irs.gov/pub/irs-pdf/p501.pdf

    Upkeep includes food, lodging, clothing, education, medical & dental, recreation, transportation, and similar necessities. Note that the value of lodging is determined by the fair market value of the room provided for the child - in other words, even though your ex has no mortgage there is a value to the room she provides, and that value is most likely related to the value of her home.



    As I read it the tie breaker applies only to breaking ties for two people who can both claim a child as a "qualifying child." But neither you nor the grandparents can do that - the question is whether the children are your "qualifying relatives," not "qualifying children," and there is a big difference. I don't see any tie breaker rules for qualifying children. So it boils down to doing the calculation of (a) the upkeep you provided divided by (b) the total upkeep provided by all parties throughout the year. If that number is greater than 50% then by al means go ahead and claim the children. But be sure to keep notes of yuor calculations so that if you are audited in 2-3 years you can justify your filing.
    I believe the answer lies in the wording of the tie-breaker rules below. The custodial parent is not claiming the children by not filing a return. The OP has the higher AGI because the custodial parent claims no income.

    [SIZE=1]If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year.

    If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. If the child's parents file a joint return with each other, this rule can be applied by dividing the parents' combined AGI equally between the parents.


    [/SIZE]
    cdad's Avatar
    cdad Posts: 12,688, Reputation: 1438
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    #29

    Apr 8, 2015, 07:00 PM
    I think what is missing here is that we dont know who is filing what. The grandparents cannot claim the children if they are also claiming the mother of the children. It is an either or situation not both.

    I would say at this point file for an extension for taxes and go to court to straighten it out.

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