How do I report tax fraud for illegally claiming my child as a dependent?
Full Question:
Answer:
The Internal Revenue Service (IRS) allows an individual to take a tax deduction for each qualifying child or other relative he/she supports. The IRS has very specific definitions of who qualifies as a dependent for tax purposes. A person can claim one deduction for each dependent he/she has.
The IRS is clear on several situations where a person cannot claim a dependent:
The person is not related to you.
You or your jointly filing spouse is claimed as a dependent by someone else.
Your dependent is married, filing jointly, and has tax liability on his or her own return.
The person is not a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico for at least some part of the tax year. Exceptions are allowed for adopted children.
If a person intentionally claims someone he/she knows does not legally qualify as a dependent, he/she will likely owe the IRS additional taxes. He or she may also owe fines or penalties, or be charged with tax fraud.
In the case of fraud, the penalties can be significant.
If there is any underpayment of tax on your return due to fraud, a penalty of 75% of the underpayment due to fraud will be added to your tax.
Also, a persono may be subject to criminal prosecution (brought to trial) for actions such as:
Tax evasion,
Willful failure to file a return, supply information, or pay any tax due,
Fraud and false statements, or
Preparing and filing a fraudulent return.
If you suspect or know of an individual or company that is not complying with the tax laws, you may report this activity by completing Form 3949-A. You may fill out Form 3949-A online, print it and mail it to:
Internal Revenue Service
Fresno, CA 93888
If you do not wish to use Form 3949-A, you may send a letter to the address above. Please include the following information, if available:
Name and address of the person you are reporting
The taxpayer identification number (social security number for an individual or employer identification number for a business)
A brief description of the alleged violation, including how you became aware of or obtained the information
The years involved
The estimated dollar amount of any unreported income
Your name, address and daytime telephone number
Although you are not required to identify yourself, it is helpful to do so. Your identity can be kept confidential.
