Taxes?
My SO and his ex-wife have twin toddlers. This is their first year dealing with taxes apart. Their divorce decree states that each parent would claim one child for tax purposes. They are sharing joint custody and have been splitting expenses and time rather 50/50 between the two of them.
As far as the paperwork goes, they are both considered custodial parents and there is no child support arrangements between the two of them. BM makes quite a bit more than my SO...
As far as the minutiae of expenses goes, we share a spreadsheet of expenses. When clothing, medical, childcare, etc are required, it's inserted into the spreadsheet and the expenses are reimbursed when necessary. Lately she hasn't been putting expenses into the spreadsheet but she's clearly been spending large sums of money on clothing. The kids are always coming over in new clothes but they never show up on the expense report... (Also, she spends rather excessively and never consults my SO when making large purchases. It's like she walks into a store and sees a big "50% off!" coupon... Or, I fear, she will use these hidden expenses to show that she is the one spending greater amounts on the kids. Heck, anytime one of the kids so much as cries, she takes them to a toy store and buys them things to keep them calm.)
So now comes tax time... BM was demanding that she be able to claim both of them since she makes the greater amount -- regardless of what the divorce settlement stated. When my SO expressed some hesitation on her demand, she began threatening custody, child support, etc. After that, he went ahead and filed one of the twins per the divorce agreement. When she found out about that, she went ahead and filed both of them to force an audit. She says that the IRS will take her side because she makes the greater amount in income AND that a custody battle will favor her over my SO. (We live in PA...)
Needless to say, we're nervous about what she's up to. She's proven herself to be unstable. Has anyone else been in this situation? Any advice on how to handle? Any idea on what we can expect?
Why must people be so bitter??
Ok, who had the idea of the
Ok, who had the idea of the spreadsheet?
That takes waaaay too much involvement for parents who are divorced. I can't imagine having to log everything I spend on my kids...
How are both considered custodial parent? Each parent is custodial of one kid?
This sounds a little complicated, but at the end of the day, there's a court order stating who claims what.
She can go to the courts and
She can go to the courts and try to get things changed but as of right now, SHE is the one who is in contempt.
From my experience, the
From my experience, the second person to claim a dependent is the one who will be flagged for an audit. Happened to me when my ex decided he was going to claim both children when we usually did one each. It was a hassle, but the audit did not change my return. When I asked if he would be audited, they told me no, his return didn't get flagged because it was filed first.
There is a court order.
There is a court order. Unless the IRS somehow overrides it, I can't see how this is even a problem for you and SO. Its her fault for going against the order. No matter what her argument is, there is legal document that she has gone against. I wouldn't give this any more thought. Her problem. Not yours.
I agree about the
I agree about the spreadsheet... It's rather involved and she's venomous enough that any extra involvement with her seems like it gives her another opportunity to control everything. (I'm sure the above post will make it clear that she's a bit of a control freak.) I dislike that they do most of their arguing and co-parenting via text.
When I asked my SO if we could find better arrangements than texting, he tells me that this way he has a record and he's at least happy that they can occasionally share positive parenting moments between the two of them. I am just learning to hate texting...
Since my SO and the BM both have irregular work schedules and the toddlers are twins, their divorce arrangements were designed to allow for flexibility on both their part and to keep the kids together. The twins haven't been apart since they were born and my SO and the BM are reluctant to split them up.
The IRS Form 8332 to release a dependent for tax purposes has been filled out on our side but she refuses to sign for the other. Am I getting the right impression that the only place this is going to go is to court? Is it true that courts still side with the BM for custody? This seems rather disheartening...
For tax purposes (this year
For tax purposes (this year at least) you shouldn't have to worry about anything. This happened to us last year.
For us, the CO dictates that DH can claim SD even years and BM claims her odd years. She signed the 8332 form a few years ago, checking off the "all future even years" as well.
For 2010, BM decided to claim SD even though it wasn't her year. BM and DH have the same accountant still (don't get me started on that one!) and the accountant must have told BM that DH was claiming SD, knowing he already prepared the taxes for BM claiming SD as well. So BM texts DH saying what she did and offered to give up the next year to make up for it. DH said no, and it's up to her to amend her taxes. We filed like we normally would and I included the 8332 form as well as a copy of the CO for the IRS. We received our refund in the normal amount of time.
Fast forward 6 months and we received a letter from the IRS stating that someone else had also claimed SD. Apparently BM did not amend her return. The paperwork said that if we are not in the wrong, we do not need to do anything. So we didn't, and haven't heard anything since.
So even though we filed second, it appears that if you have paperwork backing things up, the IRS will first give your refund, then figure out who was in the wrong. One year we didn't send the 8332 form and BM didn't claim SD, we still didn't get our refund without hassle. That form does wonders!
But she won't sign the
But she won't sign the documentation required... The divorce decree even explicitly states that each party will provide the other the appropriate paperwork for claiming a single dependent...
IRS Rules are simple - 365
IRS Rules are simple - 365 overnight a year... who had 183 overnights? This is who gets the deduction.
You can sue her for the deduction, expense of an audit & contempt of court should it be you with 182 days.
Also, fellow Pennsylvanian here & PA favors status quo tremendously. They won't change 50/50 without a change in circumstances.
The IRS will send your
The IRS will send your husband a letter stating that someone else has also claimed the child he claimed on their income taxes. They will give you instructions for submitting documentation (the court order) proving that he had the right to claim the child.
Change your arrangement from the "spreadsheet" to "previously approved expenses". BM will end up paying your DH CS if it goes to court anyway. No biggie. Also, when this goes to court, get the judge to detail in the court order EXACTLY which expenses you guys split down the middle. Normally it's medical and a few other things, but in the case of 50/50 custody, usually parents each buy clothes and accessories as needed for their own home, and vice versa. There should be no reimbursement for things like that. Same for gifts, parties, etc.
Today we received papers from
Today we received papers from the court that she's suing for child support. She's also claiming residential custodianship of both children in direct disregard to the divorce decree. When we called her to discuss why she would push this -- she stated that it would be in the kids best interest if she could eliminate her debt. She says that she is also looking to move to other states on the other side of the country and that my SO could only hope to see the kids once a week -- or less if she gets a job out of state.
SO agrees that we need to get a lawyer... This is really sad.
The court appointment is for later this month and BM is scheduled to get remarried in late May. Does anyone know if the court will take her fiance's income into account?