Before I get to the big issue I need to include some background
info. My wife and.her ex husband have 2 children, and they share equal custody
and visitation. Therefore each of them have custody for both children 50% of
the year. So, the way they claim dependents is that she claims the daughter and
he claims the son. This is written into their divorce decree(which the IRS does
not recognize because it was issued by the state of Kentucky). So, 2011 was
their first year divorced and there was some miscommunication and they both
claimed the same child. His return was accepted because he got his finished
first. Hers was denied. She completed an amended return with the correct child
as dependent. It was later that she found out that her identity was stolen, and
someone had collected her tax refund. So her case went to the identity theft
division of the IRS where it sat for 7 months, and no one looked at it. Finally
whenever they released it it was pulled for an audit. Also her 2012 return is
being held till her 2011 taxes have been resolved. So, the IRS is holding around
$10,000 of her money. She has been fighting this for almost 2 year's, she has
faxed around 300 pages of paperwork to the IRS, she has been working with a
taxpayer advocate for several months and it is getting nowhere. No w they have
ruled on her case that she was entitled to a $400 tax refund for 2011 a nd now
they want to review 2012. They say she can't claim the girl as a dependent
because she doesn't have proof that the girl lived with her for more than 6
months. She has statements from the school principal, the daycare, and the
landlord that say the girl lived with her. She has a calender with the days the
girl was at her house(190 days in 2011), along with everything else the IRS has
asked for. Then when she does send it to them they reject it. I just want to
know how to prove it to them that she is a dependent, and that my wife can
claim her and the head of household(we weren't married at the time). This has
almost become a full time job dealing with this mess. Should we get an attorney
or is this just a hopeless cause?
Answer :
There are as many tax issues as there are taxpayers.
Everyone's situation is unique. But taxpayers who find themselves disagreeing
with the IRS share a common bond. Each has the right to appeal the agency's
findings. In some cases, an appeal of a tax decision can begin and be settled
immediately. If examination of your return is at an IRS office, you can request
an on-the-spot meeting with the examiner's supervisor to explain your position.
If an agreement is reached, your case will be closed.If that fails or the
examination took place outside of an IRS office, the tax examiner will write up
the case explaining your and the IRS' positions and send the report to the
district office for processing. Within a few weeks, you should receive the IRS'
findings on your case. If you don't agree with this, your next step is to go to
an IRS Appeals Office. A local Appeals Office is a separate and independent IRS
office. Its tax-dispute conferences are informal, and can be conducted by
correspondence, telephone or in person. Get in touch with an appeals office
when you:Need help in determining that the IRS made an incorrect decision due
to misinterpreting the law; Believe the IRS did not properly apply the law due
to a misunderstanding of the facts(You need to be prepared to clarify and
support your position.). Always refer to specific IRS decisions, usually cited
on the examination notice. In each case where you believe the facts used by the
IRS are incorrect, make sure you have records or other support..Read more…
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