Margaret CPA in OH

On what website are you folks seeing this? I went to IRS.gov and found nothing.

MAS, where did you get this diatribe? He is/was? a very troubled soul...

My email address is [email protected]. I sent you a pm.

I might be able to help with the 2555EZ having done a couple myself. What is the question?

Thanks, Gail, I needed that!

Thanks for clarifying your status, KC. And special thanks to your son, too, as he must have shared his expertise via your gracious intervention many times with us. As mentioned in my latest entry, I do believe that she will do the right thing and she did say she is not upset with me. I will remember the phrase, though, that we are limited to what the law requires. I just want to be certain that I understand what the law does require. I think we all come down on the same side of this issue. I don't think it will be the last time some of us will be faced with it. The next and continuing issue (with a new client today...sigh) is the substantiation of business use of listed property and mileage records. And I specialized in tax in graduate school because I really dislike audit! Thanks again to you and all for helping me and any others to work through this process!

Barbara has a good friend in you. Let her know her circle of friends is greatly expanded now and that she is in the care of hundreds more...

Just as I was preparing an email to this client, basically saying what you have said in explaining why I could not go along with her position, she called. We had a pleasant discussion, she did understand and holds me blameless and asked that I send her the email anyway. I did so and asked her to just let me know her decision but that I cannot file the child as a foster child. She appreciates, more than I originally gave her credit for, my position and integrity. I believe she will ask me to file correctly and continue her work for social change while following the current laws. I don't believe she holds a grudge against me, either. I just hope she does not decide to go against professional advice. I have not given her a tax return to review yet so she would have to start from scratch. This is one of the toughest client situations I have had to deal with in over 20 years. I have no clients that need EITC and have never had a custody issue before. Most of my folks are higher income, more complex situations, including kiddie tax! but this has been perhaps the most emotional. I've lost a handful of clients because of dubious financial dealings, especially with self-employment, so I really don't compromise my ethical standards. I just ask them to go elsewhere as I am unable to assist them. Thanks again!

Tom, I think I will lose her because she seems quite firm that her child should be recognized as her child in all respects. I am now convinced, however, that I cannot list the child as a foster child on the tax return, that my uneasiness and uncertainty is well-founded. I do appreciate all the input here, especially from KC with legal opinion. But the local attorney's opinion is more weighty, I think. Especially as the local attorney has the same situation. Oh well, should she choose to go elsewhere, at least I won't be anxious about trying to defend a position of which I am not certain. Thanks again to all for responses.

Great thoughts, Tom. That's why I am so unsettled about this. Just a short while ago I called an attorney friend who has similar circumstances personally. She and her partner are both attorneys so the birth parent will always be able to claim the child without question as both work. Interestingly, this attorney in the same state gave the opinion supporting jainen's position. Custody is not the same as placement of a foster child in her opinion. This client would not choose to call this child a foster child but, because the laws do not permit marriage nor adoption by her of this child, she is in a sort of limbo. It isn't just the $1000 ctc, either. It is somewhat of an affront to have to put "none" as the relationship and consider the child merely a qualifying relative. The court order states that my client 'is also now to be considered a custodian as the result of the agreement of the parties....and does not in any way terminate (mother's) legal status as parent of the minor child.' It goes on to specify certain rights and responsibilities but only so far as the state can determine. Federal tax status isn't one of those. I am afraid that I side with the qualifying relative status and will likely lose this client after 11 years. But I can't put down what I don't believe is supported by the law. And I don't believe now, based on the local attorney's opinion, that calling this child a foster child is correct. I just wish this weren't so complicated. I know this to be a loving family and this child is every bit as much a loved child by my client as any parent-child relationship. Thanks for your input.

I had the same concern which is why I asked for any attorneys to weigh in and KC did so, graciously. I asked what you think is missing because perhaps I can find something specific in the document which addresses that. I could retype the entire thing here omitting the identifying names, of course. Would that be of any use? While you are not an attorney, I nonetheless respect your wisdom and cautiousness about tax issues. I wonder if there are state documents that precisely define placement, foster child, custody, etc. The decree does address custody, visitation and support rights which sounds like a divorce decree, doesn't it? I just want to be correct on this.

Fair enough, jainen, but what 'further evidence' would be desired? The pub. states a 'foster child is an individual who is placed with you by....judgment, decree, or other order of any court of competent jurisdiction.' KC has stated that 'placed with' means also grants custody. The court order does that. What do you think is missing?

KC, thank you, thank you, thank you. I tend to take things quite literally, including this time. I so appreciate your willingness to share your legal as well as tax expertise here. My client will be very pleased!

What a tease you are, rick in cal! You could still call and, by the time you get connected with someone, there will surely be another question you can ask.

Thanks, bcolleen, child tax credit. The snow is blinding me and interfering with proper thinking.

KC, are saying to claim the child as qualifying child (not qualifying relative) and receive child care tax credit? As I wrote, I am hung up on the 'placed with you' phrase in Pub. 501. The child was not placed there but there is clearly a court decree ordering rights and responsibilities. And thanks for weighing in!

Well, the client is stating that the court document ordering joint-custodial status defining rights and responsibilities meets the test under Pub. 501 for Foster child. That is, a 'foster child is an individual who is placed with you...by judgment, decree, or other order of any court of competent jurisdiction.' This matters for child tax credit purposes. Both the client and birth mother have equal rights and responsibilities plus the client is ordered to provided healthcare insurance coverage for the minor child through employment, if available. So I'm now hung up on the term, "placed with you." I am not a lawyer. I know the clear intent here but want to be sure when filing this return. Any attorneys out there?

Thanks for responding, Pacun, but further research has provided the answer. The child can, in fact, be claimed by the taxpayer as a qualifying relative in this case. "A person will not be considered to be the qualifying child of another taxpayer is that other taxpayer is not required to file a tax return under IRC sec. 6012 and that person (1) does not file an income tax return or (2) files solely to claim a refund of withheld income taxes. (Notice 2008-5)" So the child and the birth mother both meet the criteria to be qualifying relatives of this taxpayer but the child is NOT a qualifying child. This, despite the legal co-custody agreement, it appears. Dependents, credits, exemptions, UGH! Time to seriously look at retirement!

Unmarried same sex couple have a child. The birth mother earned less than $2000. The other partner provides all support. The birth mother is not required to file but I cannot definitively determine the child's dependent status. The child - can - be claimed by the birth mother but won't be because she is not required to file. So does this child qualify to claimed as a dependent by the other partner because the birth mother did not file? And if so, would this be a qualifying child or qualifying relative? The other partner has legal co-custody. They state they are not in violation of local law. Thanks for any help with this!

:bday: and many more!

I agree, Jainen. I am copying from an email that I received and some of the things are just funny. Of course I am an idiot in many things at many times. We all are occasionally. Well, at least I am. Blindness isn't a joke, I am blind in one eye. But that doesn't prevent some things from being funny. Disability access is no joke either. That's why I scratched my head the first time I went to my local bank just after moving here and was puzzled as to why there was a clearly marked handicapped parking space right in front but no ramp, only a pretty high curb. I talked with the manager who had no clue. It took 2 more awareness raising discussions and about 3 months for a ramp to be put in place. Thanks for once again setting me straight. I have failed miserably at the contributions to humor and will return to my cave.

Oh, Catherine, I nearly dropped my teeth the first time I saw that! I just had to ask about it and was given the explanation that it was for people with low vision who might walk up to the window. Well, I suppose so..

7. The stoplight on the corner buzzes when it's safe to cross the street. I was crossing with an intellectually challenged coworker of mine. She asked if I knew what the buzzer was for. I explained that it signals blind people when the light is red. Appalled, she responded, 'What on earth are blind people doing driving?!' She was a probation officer in Wichita KS 8. At a good-bye luncheon for an old and dear coworker who was leaving the company due to 'downsizing,' our manager commented cheerfully, 'This is fun. We should do this more often.' Not another word was spoken. We all just looked at each other with that deer-in-the-headlights stare. This was a lunch at Texas Instruments.

The data would appear if the organizer was added to the 2008 return and printed from there. If you add it into the 2009 return, you will have to input the figures yourself.

OldJack, we all are holding you and family in our thoughts and prayers. As I tell my employees, family first. Nothing can replace them.