A young person caring for a younger sibling whose father has “issues” as well as custody sounds highly problematic.

There are also potential ramifications as far as the child’s health insurance coverage. If he was previously covered as a dependent on his father’s health insurance, how would his dependent status for tax purposes affect that coverage?

So she should definitely get competent legal advice as well as tax advice.

Fair or not, I am assuming that mom isn’t around. It didn’t seem logical to me that dad would get custody but the child would opt to live with the sibling (who I’m imagining isn’t terribly flush since she’s in college) as opposed to mom, especially since statistically, moms get custody far more frequently than dads. So, my guess was that mom wasn’t claiming the daughter – but then, we don’t know that for sure.

Normally, I’d ask the taxpayer for more info but I think sitting down with an attorney is just super important and not just for taxes. I’m also concerned about the family law aspect – who has the legal permission to make decisions for the brother. Clearly, it’s dad. But we don’t know how far apart they live – what if there was a medical emergency that required parental consent for treatment? I do hope daughter gets some professional advice!

1) Is she herself the dependent of another taxpayer? The fact that she works and lives by herself while attending school, and files her own taxes does not necessarily mean that she is entitled to claim herself on her return. For example, if her mother is contributing to her support by paying college bills or giving her money for expenses, etc. , she might be her mother’s dependent.

2) If she IS the dependent of another taxpayer, then she may not claim any dependents of her own. The IRS is very clear on this issue: dependent taxpayers may not claim any dependents on their returns. So the first thing she needs to do is to be very careful to determine whether she is even allowed to claim herself on her own return.

3) The shared residence question is tricky for college students. Even if a college student did not physically live with her parent for most of 2008, the IRS may consider a college student to have “resided with” her parent, because the IRS generally deems absences from home to attend college, get medical treatment, visit relatives on vacation, etc. to be “temporary absences.”

4) The determination of dependent status can be very complicated. The rules Kelly listed above were the rules for a “Qualifying Child” dependent, but in some cases a child may not qualify as a “Qualifying Child,” but may be a “Qualifying Relative,” which has somewhat different criteria.

Another great free resource for your correspondent is the Volunteer Income Tax Assistance (VITA) program where she can get free help from volunteers with IRS training and certification. If she’s lucky, there might even be a VITA program run by a faculty member on her own college campus.

If she’s really lucky, depending on her major in college, she might even be able to enroll in a credit-bearing service-learning course at her college, which would give her IRS training and access to consultations with experienced supervisors and an “IRS relationship manager,” a specially assigned employee at the IRS in a division called Stakeholder Partnerships, Education and Communication (SPEC) who can help VITA volunteers to figure out how to deal with tricky situations like hers.

Whether or not her college offers such a course, she can get access to the free IRS training offered to VITA volunteers on-line here.

http://www.irs.gov/app/vita/basic_module.jsp

In order to make sure that her tax preparer is asking the right questions and reasoning through her situation correctly, I would highly recommend that she at least work through the module on personal and dependency exemptions here:

http://www.irs.gov/app/vita/content/0102/0102_00_000.html

Working through the examples in that module will enable her to have a better-informed conversation with her tax pro.

Even just as a first-year preparer working for HRB, I’ve run into more than one situation where family dynamics like this come into play — it’s not just a matter of asking the software who gets to claim whom an plug in the numbers — sometimes, I tell someone they’re entitled to claim a child or grandchild (or other person living with them) as a dependent, but they tell me they do not want to do so, for reasons that have nothing to do with their tax liability. This is an unusual case, but by no means unique — often, domestic harmony requires someone to do something disadvantageous, from the tax pro’s point of view!

Urb