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My client is not claiming an 18 year old still in high school so that child can get the recovery rebate!

Well this isn't really a question but I need to tell someone that understands!  My client's 18 yr old made less than $4000, is still in high school now, and they told me to file her taxes and claim the recovery rebate.  After spending a long time on the phone with them explaining to them they can't do that and why, they still are going to.  I told them I would not file the child's return.  They are going to do it in turbo tax.  They called me back and said they answered all the questions correctly and she is getting the $1800 and to take her off their return as a dependent.  I told them I would take her off.  Could this be fraud on their part?  I have followed everything up with emails with explanations so I have documented my part in this.  Of course they called an EA friend of theirs who conferred with their CPA boss and was told they could do it.  And of course all of this girl's friends are doing it.  yada, yada, yada....Sheesh!  So....wait....I do have a question.  Will the IRS give her the money or not?  And if they do will they audit and ask for it back?  I am not enjoying tax season this year as I usually do.  πŸ˜•

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20 Replies 20
Just-Lisa-Now-
Level 15
Level 15

I had a client call and asking about them claiming their dad on the return, they support him and claim him every year, but he wants the stimulus.

I explained to them how it worked, and said

"If you want to tell me you dont support him anymore, I have no problem taking him off your return, but I wont file a return for him to get the stimulus and I wont put him back on your return in 2021 when he suddenly becomes a dependent again."

They havent been in yet, so I dont know what theyve decided.

 


β™ͺβ™«β€’*Β¨*β€’.ΒΈΒΈβ™₯Lisaβ™₯ΒΈΒΈ.β€’*Β¨*β€’β™«β™ͺ
PATAX
Level 11

God bless you Lisa... In my opinion you did the right thing🌳... if they do not want to do the right thing then they may leave, hence the tree, "like a tree: leave"🌳

I have a client that takes her mom....I am waiting for that conversation too.  I think I'll use your method Lisa.   

BobKamman
Level 15

And now they are giving up the $1,400 in the pending legislation.  

sjrcpa
Level 15

"Could this be fraud on their part?" Yes

" Will the IRS give her the money or not? "  Probably yes, which does not mean it is right

"if they do will they audit and ask for it back? " Maybe

We can only do what is right, and explain to our clients the tax rules.

Greed is rampant lately with people sticking out their hand for free gov't money.

If your "clients" do this despite being told it is wrong, do you really want this type of client?


ex-AllStar
PATAX
Level 11

God bless you sjr... I am sick and tired of this rampant greed also. When will this nonsense end🌳

Thank you for the answers to my question.  But that is what I figured.  I know...I have pondered this question about keeping them for a client.  I wonder if I made mistake and should have just told them IT IS WRONG.  I had to bite my tongue to not say their EA friend and her CPA boss were wrong.  I just said that I'm not sure they had all the info to go on.  Oh well, I just got an email from them and they are still considering it.  So at least I made them think!  I'm not a CPA or an EA but I have been doing taxes for over 30 years, I do seminars all year long and I am an honest, law abiding citizen...well...I do go about 5 to 7 miles over the speed limit on the highways.  πŸ€” πŸ™„

Bsch4477
Level 3
Level 3

TurboTax would not have allowed the stimulus had the child checked the box saying that the child could be claimed by someone else. By not doing that the child filed a fraudulent return. 

sjrcpa
Level 15

Our professional software won't do it either. But you have to indicate the person could be claimed as a dependent.


ex-AllStar
qbteachmt
Level 15

"and said they answered all the questions correctly"

Not living on $4k, they didn't. They likely overlooked "could be claimed by someone else."

If the person is not a dependent in 2020, then they would be entitled to the payment/credit as individual filers. That doesn't mean "not being claimed." It means "no longer qualifies as a dependent."

Your client likely thinks filing for herself = no longer dependent. Let's not let the real world get in the way of wishful thinking.

If you still want to help them, send them to the Interactive wizards portal for determining dependency:

https://www.irs.gov/help/ita

And:

https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-a-eip-eligibility

https://www.irs.gov/coronavirus/second-eip-faqs#Eligibility

One for each EIP.

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"Level Up" is a gaming function, not a real life function.
PATAX
Level 11

You hit the nail on the head QB🌳

qbteachmt
Level 15

"You hit the nail on the head QB"

Beats hitting your head on a nail...  πŸ™‚

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"Level Up" is a gaming function, not a real life function.

QB...I sent them all of that and actually copied and pasted a few items to highlight them in the email.  And I agree, they didn't answer the Turbo tax questions correctly.  The father actually kind of hemmed and hawed when I told them that and then said he cant really remember what the questions were.    I have decided I don't charge enough.  If anyone is interested in buying my individual practice/clients...I think I am getting ready to retire.  All of them live out of state from where I practice.  99% of them are in Utah. 

qbteachmt
Level 15

"If anyone is interested in buying my individual practice/clients...I think I am getting ready to retire"

I'll pay you to take mine, and you can pay me to take yours. At least it gives us a break from the usual suspects.

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"Level Up" is a gaming function, not a real life function.

hahahaha!  qbteachmt!  I needed that laugh.  thank you!  If the Government/IRS extends tax season to July again this year....well that may be the thing that will do me in.  Is 3:30 too early to start drinking on a Saturday (when I am still working?)?  Another thing I have finally made a template for in my email program is the answer to this question...  "I have been working from home all year for my job, can I take a home office, my desk, computer, chair, ink, paper, internet...blah blah blah." 

Yikes....maybe I should should just say I'm done for the day and start drinking!  I'm not really working anyway....just playing with all you guys and gals!

IRonMaN
Level 15

"They have no fear of God."

But they don't fear a higher power  ------------------- the IRS πŸ˜±

ACME Taxes, Tatoos, Tires and Tomatoes (I had to get rid of the turtles - they kept running away)
BobKamman
Level 15

@utah-arizona-taxlady 

Don't you mean, your former client?

PATAX
Level 11

I wonder how many of these people, who are trying to game the system , sit in the front Pew of their Church and point their fingers at others? These are the Hypocrites that Jesus and the prophets spoke out against. They have no fear of God.

BobKamman
Level 15

@PATAX 

The page with Matthew 22:21 is missing

PATAX
Level 11

πŸ‘