Did you receive an e-file rejection message when you tried to file your tax return? Did it say something like: “A dependent on your return has already been claimed on another returned.” There are instances where they also claimed themselves as an independent.
If you’re pretty sure you correctly entered your dependent’s information, then the message sent to you only means someone else claimed your dependent. Returns that are filed first will be processed by the IRS, so whoever claimed your dependent first will be validated and your return will be rejected by the IRS.
You won’t know who claimed your dependent because the IRS won’t tell you that. You usually end up identifying the possibilities and asking someone who most probably knows what’s going on, your former spouse could be the right person to ask first. If you can’t think of anyone who could have claimed the dependent, there’s a high possibility that your dependent is a victim of tax identity theft. You may need to research it to have a better understanding.
If you believe that the other person is not qualified to claim your dependent, you have to take urgent steps to protect your right to claim the dependent and your refund.
What to do next?
You can always correct the situation so just try to relax and avoid panicking. You need to first review all the requirements to claim the dependent. Once you’re done double checking, here are what you should do next:
1. Submit a Paper Return
Claim your dependent by printing out and mailing your return to the IRS. Your refund will be delayed because the IRS will have to look into the issue, but don’t worry, you should receive your refund. Remember that it will take six to eight weeks for the IRS to process your paper return after you file it.
2. Your Case Must Be Documented
In some instances, claiming a dependent can get complicated especially with regards to the IRS rules. What’s important is that you remember to properly provide all the relevant documentation that will prove your right to claim the dependent. You may need to include documents like birth certificates and proof of identity as well as documents that show that your independent stayed with you at the same residence for more than of the year.
Here are other examples of supporting documents you can submit:
You’ll also be asked by the IRS to complete Supporting Documents for Dependency Exemptions form.
3. Respond When the IRS Contacts You
The IRS will start to process whether or not you’re qualified to claim the dependent about two months after you filed a paper return. The IRS may send you a letter (CP87A) that states your child was claimed on another return. You will be asked whether or not you made a mistake. If you did, you will be asked to file an amended return, and if you didn’t make a mistake, you don’t have to do anything.
The other individual who claimed the dependent will receive the same letter from the IRS. If no amended return that eliminates the child-related benefits is filed by any of you, the IRS will then proceed to audit you and/or the other individual to identify which one of you can claim the dependent.
A letter will then be sent to you a few months after for the audit to begin. You will be asked by the IRS to provide proof that you have the right to claim the dependent during the audit. Make sure you are able to comply complete and you followed the deadline given to you by the IRS. Once the issue is decided, the IRS will charge (or, “assess”) any additional taxes, penalties, and interest on the person who claimed the dependent incorrectly.
If you think the outcome wasn’t what you expected, you can appeal the decision or you can bring your case to U.S Tax Court.
It’s always best to discuss claiming children with your family members to prevent a situation like this to arise. You also need to know your options and your rights so you know when they are being violated by other people. Most tax problems arise from dependent disputes so take some time to learn more about how to handle an IRS audit, or what to do in case of tax refund holds and other tax return problems that came from dependent-related credits.
As for other IRS related issue, remember that you are given the right to representation. Consult a tax professional who can take care of the issue and do all the necessary dealings with the IRS on your behalf.
