A parent claimed more amounts than he paid for child care services

[anamelkon]

I provided my information (including SSN) on W-9 to a parent so he could claim childcare expenses on his tax return. Accidentally I found that he claimed more than he paid me for child care services. I requested him to file an amended tax return and correct the wrong amount, but he refused. What should I do in order to protect my SSN from parents who report wrong amounts by using my SSN? I do have contract with a parent, which included the child car service fee agreement.

Thanks,

[taxxcpa]

I provided my information (including SSN) on W-9 to a parent so he could claim childcare expenses on his tax return. Accidentally I found that he claimed more than he paid me for child care services. I requested him to file an amended tax return and correct the wrong amount, but he refused. What should I do in order to protect my SSN from parents who report wrong amounts by using my SSN? I do have contract with a parent, which included the child car service fee agreement.

Thanks,

You could get stuck with tax on the income he reported that he paid you. Contact the IRS.

[michaelmars]

Are you sure that all that he claimed he claimed was paid to you and not to others?

[jainen]

>>What should I do in order to protect my SSN from parents who report wrong amounts by using my SSN?<<

Decline their business.

[JohnH]

Once they have your SSN, there's nothing you can do to protect your SSN from parents who report the wrong amounts. You can, however, keep good records to show how much income you received and report it properly on your tax return, which is the only thing you are responsible for doing in this situation anyhow.

[anamelkon]

Once they have your SSN, there's nothing you can do to protect your SSN from parents who report the wrong amounts. You can, however, keep good records to show how much income you received and report it properly on your tax return, which is the only thing you are responsible for doing in this situation anyhow.

I appreciate your respond.

Fortunately I kept good records and I can prove what amount I received from him.

Also I have Contracts with parents, which shows the amount for the childcare.

Because of this incident I would like to send a letter to all parents regarding to stop using my SSN number for claiming the child care expense, instead I will provide new Tax ID. Also I would like to provide new W-9 that would include the amount that is actually paid for childcare services. If I knew this would happen I would have verify the amount with each parent.

Do you think this is a good idea? Also I would like to mention in the letter that who reports wrong amount will not be able to claim child care expenses in the future years when they get audited.

[anamelkon]

>>What should I do in order to protect my SSN from parents who report wrong amounts by using my SSN?<<

Decline their business.

I really like the chlid but I told them that today is the last day that I would do business with them.

[anamelkon]

Are you sure that all that he claimed he claimed was paid to you and not to others?

A parent told me that they did not get any refund for the childcare expense that they claimed on form 2441. I asked her to read the info from form 2441 when she read my name address and SSN then the wrong amount, she mentioned two kids but I took care of only one (contract is the evidence).

[jainen]

>>Do you think this is a good idea?<<

I think you have several good ideas. An EIN is easy to get and use. A year-end summary is likewise easy and appropriate. Sending it with the W-9 will emphasize that you expect things to be reported accurately. Plus you won't have to answer all those phone calls from parents asking for your info!

[lsowers]

I know this is just a technicality, but the IRS has a form W-10 that is for child care. Most child care facilities where I am do provide a letter each January with the amounts paid.

[Burke]

I would not worry too much about the IRS coming back on you. I know its possible, but I have never had a situation where this scenario has happened, has anyone? Most of the time it is the child care provider who is threatening the client that if it is reported, they will stop caring for the child. I advise my clients who pay child care to take the deduction anyway. I do not believe they actively trace the deduction to the recipient's tax return like they do 1099's and now K-1's. At least, I have never been made aware of any case. Anyone ever experienced this? Perhaps on audit?

[kcjenkins]

If it did come down to a challange, the parent would have to prove that he paid the amount he claimed. Only if the difference was a large one would it be likely to be questioned, but if the carer has kept good records, they should have no problem.