Being Audited This Year By The IRS

Apparently, my tax return was selected for review and they are going to ask for more information about me having my kids and my eligibility for the child tax credit and the earned income tax credit.

I have been claiming my kids since my daughter was born in 2012 and after their mom and I divorced in 2016 as my divorce decree allowed me to do so as my ex-wife doesn't work due to disability. So, I thought that meant I could say that they were with me the majority of the year even if they weren't as the divorce decree allowed me to claim them.

Now that I am doing research, that apparently isn't the case.

My girlfriend and family say that it was an honest mistake and the IRS will work with me, even if I owe money back to them. My issue is that I just started not having to live paycheck to paycheck with the new job and now I feel like I am going to be doing just that once again.

One thing I have to do to prove that I can at least claim the child tax credit which I am entitled to per what I have researched is that I need to get my ex-wife to sign a form giving me permission to claim them. The IRS, allows the divorce decree to say which parent gets to claim the children, but then also wants the parent that is the custodial parent to give the non-custodial parent permission to claim the children. I am concerned that she is going to say no (any way to hurt me and she'll do it recently) and then I am going to have to take her to court and I don't want to have to take her to court.

She doesn't work, she won't ever work again due to her disability. She herself cannot claim them. There is no reason for her not to sign the form. I have a feeling she may want money from me. When we first divorced I was giving her some of the refunds that I was getting on my taxes. I stopped doing that when she took me back for more child support a couple of years ago when I realized that her lawyer had counted my tax refunds as income and figured that in as part of her child support payment. In the divorce decree, there is nothing stating that I have to give her any part of the refunds that I get each year. Our households are now equal in income per month, with her being slightly better off having a husband that also gets disability and doubles their household income and she gets food stamps and I pay for the children's health insurance. She only has to pay half the co-pays, that is when she uses my insurance for the kids at least. She went to the state over the summer and told them that the kids didn't have health insurance and got them Medicaid and hasn't used my health insurance for them. So she fraudulently got the kids Medicaid.

Sorry for the long read. I have been holding this in since I found out that I was being audited and I am not going to lie, I am scared of the IRS. I am scared that my ex is going to force me to take her to court so she can once again go for more child support since I have a new job. I am scared that I am going to end up living paycheck to paycheck again. I am finally out of that hole and don't want to be back in it again.
 
It seems to me that if they were with their mom for more than half the year then they could claim the children on their return whether or not it benefits them in any way. Whoever can claim them or does successfully claim them would also be the party to receive any child tax credit.

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It seems to me that if they were with their mom for more than half the year then they could claim the children on their return whether or not it benefits them in any way. Whoever can claim them or does successfully claim them would also be the party to receive any child tax credit.

🙏

Their mom is unable to claim them as she doesn't work and has no reason to file taxes. Also, the divorce decree states that I can claim them on my taxes for the child tax credit whether I had them or not more than six months.

What I didn't realize is that I couldn't claim the earned income tax credit because I do not have them more than half the year. I thought that because the divorce decree says I can claim them, it meant for both the eitc and the ctc.
 
Their mom is unable to claim them as she doesn't work and has no reason to file taxes. Also, the divorce decree states that I can claim them on my taxes for the child tax credit whether I had them or not more than six months.

Is their income non-taxable? I believe you indicated above that they have income. Even if they have no taxable income they could claim the dependents (notwithstanding the court order giving that benefit to you) to gain the benefits of the child tax credit. At least that's my understanding. I don't really understand the court order itself or know all of its details.... but know that where it contradicts tax law the law would win out, I suspect.
 
Is their income non-taxable? I believe you indicated above that they have income. Even if they have no taxable income they could claim the dependents (notwithstanding the court order giving that benefit to you) to gain the benefits of the child tax credit. At least that's my understanding. I don't really understand the court order itself or know all of its details.... but know that where it contradicts tax law the law would win out, I suspect.

They get SSDI. So their income is not taxable. Maybe this year they could claim them, but it would only be for this year as the credit was made fully refundable.

However, tax law does not win out over the court order. The court order is binding on her. That would be the reason that I can take her to court to make her sign the form. Basically, the order simy states that I can claim them on my taxes. That is all it says.

Per the tax law a court order giving the non-custodial parent the right to claim his children is exactly that. The messed up part is that while the law says that, it also requires you to get permission from the custodial parent to do exactly what the court order says.

As long as she signs the form there's no issue. However, if she doesn't I have to take her to court for contempt of court for not abiding the court order and I really do not want to do that.
 
Update: Dropped the kids off at their mom's and asked her to sign the form that I needed to have signed for the IRS and she did so without hesitation.

So, now I will send what I have to the IRS and pray that I don;t get audited anymore and they will accept what I have.
 
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