Tax Conundrum involving children

[henryclay]

I received a question by phone that I was reluctant to give a definitive answer to.

She called. She is married but has a legal separation and has not lived with her husband for three years. She could finalize the divorce "just by signing some papers".

They have three children who live with her. He pays no separate maintenance, but he does pay an unspecified amount of child support and the separation order does not address who can claim the children.

Now the “good” part.

She does not work and she and the children have lived with her boy friend “for the last 18 months or so”.

She wants to file a joint return with the boy friend and “let him claim the children”.

Can someone please unravel her problem and make a/some recommendation/s?

Thanx.

modified title to reflect forum
-chiver mod

[mwcpa]

boyfriend means not married.... so he and she are single.... plus, I thought having more than one spouse was illegal in most states, therefore for tax purposes you cannot do it....

does the boyfriend provide more than 1/2 the support for the children?

we have had a number of discussions on this kind of issue over the last month...seems to be a hot topic.....

look at the ones started by morrisliberty, I think you'll find lots of back and forth and links that may be helpful, instead of repeating it all over again.....

added....Henry try this link...
www.irs.gov/publications/p501/index.html

[chiver78]

henry, in an effort to avoid confusion, would you mind editing your title to say "tax conundrum" or something similar? people sorting by new posts (like myself) might click on this, expecting something entirely different. I can make the change if you'd like.

thanks
-chiver mod

[bean29]

I did not think you could file a joint return with someone you were not married to. If she is not divorced from the ex, the new BF she is living with can not claim the children. I doubt she could either, b/c she is not supporting them, her ex Husband and her boyfriend are apparently providing all the support.

[henryclay]

Jan 23, 2012 16:32:34 GMT -5 chiver78 said:

henry, in an effort to avoid confusion, would you mind editing your title to say "tax conundrum" or something similar? people sorting by new posts (like myself) might click on this, expecting something entirely different. I can make the change if you'd like.

thanks
-chiver mod

I'm confused myself. This is the tax matters forum. I asked a tax question about children. I checked other posts and find the titles are all over the map, so I really don't understand the problem. If there is one, would you please fix it so that you are satisfied the possibility of confusion is eliminated?

Thanks for your attention, your interest, and your cooperation.

[chiver78]

never mind, you're deliberately being obtuse.

I've adjusted to account for any posters that happen to use the "new topics" button I mentioned before. I hope you find answers that satisfy your question.

-chiver mod

[mwcpa]

for other readers and henry, if we can get back to the question raised, the answer may lie in my post (#2).... click the link to the IRS publication and you will find that the boyfriend probably cannot treat her children as his dependents....bean also put in some good comments too....

[Rocky Mtn Saver]

Might the boyfriend at least be able to benefit from the children he's supporting (if he provides more than half their support) by being able to file as Head of Household?

[mwcpa]

from IRS pub 501...

"Example 3—girlfriend.

Your girlfriend lived with you all year. Even though she may be your qualifying relative if the gross income and support tests (explained later) are met, she is not your qualifying person for head of household purposes because she is not related to you in one of the ways listed under Relatives who do not have to live with you . See Table 4.

Example 4—girlfriend's child.

The facts are the same as in Example 3 except your girlfriend's 10-year-old son also lived with you all year. He is not your qualifying child and, because he is your girlfriend's qualifying child, he is not your qualifying relative (see Not a Qualifying Child Test , later). As a result, he is not your qualifying person for head of household purposes. "

[Rocky Mtn Saver]

However, if the girlfriend has no income and is not required to file a return, can't her child then qualify as a qualifying relative of the person who does provide the home and support?

Also from Pub 501

"Example 1—return not required.

You support an unrelated friend and her 3-year-old child, who lived with you all year in your home. Your friend has no gross income, is not required to file a 2011 tax return, and does not file a 2011 tax return. Both your friend and her child are your qualifying relatives if the member of household or relationship test, gross income test, and support test are met.

Example 2—return filed to claim refund.

The facts are the same as in Example 1 except your friend had wages of $1,500 during the year and had income tax withheld from her wages. She files a return only to get a refund of the income tax withheld and does not claim the earned income credit or any other tax credits or deductions. Both your friend and her child are your qualifying relatives if the member of household or relationship test, gross income test, and support test are met."

[rangerj]

How much is the "unspecified child support". I would think that this has to be considered in the determination of who provides more than 1/2 of the support of the children.

[henryclay]

Rocky Mtn Saver says, from Pub 501:

"Example 1—return not required.

You support an unrelated friend and her 3-year-old child, who lived with you all year in your home. Your friend has no gross income, is not required to file a 2011 tax return, and does not file a 2011 tax return. Both your friend and her child are your qualifying relatives if the member of household or relationship test, gross income test, and support test are met.

And the same Pub. on pg 14 under Tiebreaker rules we find:

If the parents do not file a joint return together, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year.

rangerj, I may be wrong, but regardless of the amount of support provided, (and she didn't say), it is my understanding that unless the custodial parent releases the dependency exemption, (by use of Form 8332 or a similar document), the IRS will not complete processing of a return with any claim for the exemption by the non-custodial parent, and request an accounting from the custodial parent for the dependent's support and source/s of that support.

When these rules were first written I recall several such requests for accounting. We had to get statements from schools, doctors, AFDC, etc. to verify who was the responsible parent.

But I don't recall any quite like the one in this case. Thanks for all the help.

[taxref]

"rangerj, I may be wrong, but regardless of the amount of support provided, (and she didn't say), it is my understanding that unless the custodial parent releases the dependency exemption, (by use of Form 8332 or a similar document), the IRS will not complete processing of a return with any claim for the exemption by the non-custodial parent, and request an accounting from the custodial parent for the dependent's support and source/s of that support.

When these rules were first written I recall several such requests for accounting. We had to get statements from schools, doctors, AFDC, etc. to verify who was the responsible parent."

In this case (ie: the mother is not filing HOH herself), the IRS would not know who the custodial parent is. The only way it would be kicked out of the system, and verification requested, would be if both the boyfriend and the father claimed the same child as a dependent. Then both parties would receive a request for verification.

I agree with Rangerj that the isssue of who provides over 1/2 of the children's support is critical to the answer. The rules for divorced or separated parents only apply if both the 2 parents combined provide over half the youngster's support. In this instance, we know the mother provides zero. If the child support does not cover over half of the children's support, Form 8332 doesn't come into play. The father cannot claim the children.