Rule#1 -  I may just tell them to go elsewhere, lol

May be the best idea yet!

Question, Does correcting / amending the 2020 returns have any financial impact? If yes and they are unwilling to make the correction, they are not the kind of client I want to be working with, consequently - Rule #1.

You would file his return irrespective to any ACTC she received, but I would only prepare that so long as she agrees to file a return for her (paper if the efile won't work due to no income) showing that she has to repay the advances.  If that doesn't work - Back to rule #1

With all the time you are spending researching this and thinking about it your not making any money off of them anyway, why take on clients that as soon as they sit down they start pulling red flag's out of every pocket and their ears? Life is too short.