Comments on: IRS Insists Mom is Too Poor to Support Kids

By: Tax Audit Frequently Asked Questions

Tax Audit Frequently Asked Questions — Mon, 03 Jan 2011 22:45:31 +0000

[...] income (when forms 1099 or W-2 submitted to the IRS don’t match what you’re reporting); tax deductions that appear to be too high, considering your income; claiming personal exemptions for dependents already claimed on other tax returns; or [...]

By: Ask the taxgirl: Reporting Alimony Received | taxgirl

Ask the taxgirl: Reporting Alimony Received | taxgirl — Sun, 21 Nov 2010 23:49:15 +0000

[...] may, in fact, raise some eyebrows if the right (or wrong) person starts poking around. Remember this woman who was considered by the IRS to be “too poor” to support her kids? The numbers she offered didn’t make sense to the [...]

By: ellny

ellny — Fri, 03 Sep 2010 02:04:10 +0000

I just had the same problem. I do not live with my sister. My daughter lives with me in a one bed room apartment. She also goes to college a graduate now still unemployed. The IRS was looking at a IRA I had and said I owed them $5000 but the bank records cleared that up. The IRS agent started asking me were dose your daughter live. I told her that she lives with me and we both use my sister address as a mailing address. After we moved back to our home state we lived two month at my sister house and then moved into the same apartment and have been their for 5 years. I lived out of state with my daughter for 10 year and have always claimed head of house hold. My apartment complex have no record of occupancy and will not give me a letter because they do not want to get involved. I am not rich but I am intelligent and I do my own taxes. But boy I miss this one! I never in my life expected some one to question my daughter’s occupancy. Some one has to write a web site for single moms who pay taxes. I have appealed.

By: car lease guide

car lease guide — Sun, 06 Jun 2010 17:37:00 +0000

Wow…this is definitely a story that I’ve never heard before. But I agree with your final paragraph; the IRS needs money.

By: Andrew Pelt

Andrew Pelt — Sat, 29 May 2010 10:02:08 +0000

Good post, thanks for it!

By: telliott

telliott — Tue, 27 Apr 2010 14:54:15 +0000

I know from the Audit experience that what is in the guidelines given to us by the IRS every year is just that a guideline. When you are audited by the IRS, they don’t go by those booklets. They have their own internal rules they follow. My audit resulted in the denial of my husbands travel expenses because his company would not allow him to copy their procedures showing non=reimbursement for his travel expenditures. Although it was required by his employer. Because of that, his expenses were denied, resulting over three years to a $10K return to the IRS.

Now, as for dependents, if the parents received income from a child while living at home to cover the cost of living there, the parents can not claim the child or the child’s children on their tax return. In the case above this was the incident. However, regardless if the mother lived with her parents, she is entitled to declare them as dependents as long as she can prove she has supported them 1/2 the year. IF there is a spouse who has the right to claim them on their tax return, they can do that, and the mother can not legally have them on her tax return.

there is a fine line between the booklets and the actual irs law. i could prove the documentation, but it did not matter. it’s up to the auditors interpretation of your return. Hire a tax attorney and make sure your records are in order. the above case is missing information for anyone to make judgement. how would you feel to be invaded with an audit, and find your charitable deductions no longer qualify? or that the education credit you took for your continuing education credits required by your job are invalid because you don’t have something in writing on letter head from your company?

I feel for anyone who experiences an IRS audit, its horrifying to be told you are too poor or you can’t do this or that, when they can not prove to you in the booklets made available to the public that what they are telling you is correct! You have to take the word of the auditor!

By: Mrs Smith

Mrs Smith — Sun, 07 Mar 2010 04:16:19 +0000

@PFC: The EITC is on a bell curve, so if someone only made $3500 they’re not going to get as much EITC as someone who reported enough income to get the max EITC. So would it be in the government’s best interest to pursue that person who reported $3500? Or should they examine somone who got the max EITC? And please don’t throw in the rental activity arguement. They get examined as well…..@Faith: What other recourse would you suggest Ms. Porcaro have? On what grounds? Your post includes some kind of cap on people who make $100K. To what cap are you referring, and how does that relate to Ms. Porcaro? As far as lawsuits, on what grounds would the lawsuit be? Whatever’s put on the tax return must be backed up by documenation, for anyone, rich or poor. If someone says they’re paying someone else for working for them, or for rent, that brings another person into the mix. Is the premise of your “lawsuit” that no one should have to prove what they say? However, I do agree with many, and I never get tired of saying that there’s a lot about our govt and tax system that needs to be fixed, so call your CONGRESSMAN and complain. THEY write the tax code, THEY provide the guidelines for enforcement.

By: Faith

Faith — Sat, 06 Mar 2010 16:45:03 +0000

Who could have helped the Porcaros? Was she not given any other recourse? If not why no? Are there no other government agency that single moms or the poor, like her, like me could turn to?

There are a great number of people who are earning over $100k in a year. Why can’t they put a cap on they? And how do we post complaints about abusive IRS agent? How do we file a lawsuit agains them? Can we even file a lawsuit against them? They cannot be allowed to start acting like gods. Focusing on everyone in Porcaros family is excessive. What were they trying to accomplish?! Add the whole family in the welfare system? How is that going to help with our economy?

Can someone in the government really look at the big picture and fix this? It does not seem fair what the IRS did to this woman and her family.

By: PFC

PFC — Sat, 06 Mar 2010 14:36:50 +0000

As someone who makes a living doing taxes, I see alot of these cases. I work at HRB and we are doing due diligence with each case of EITC. This is setting off alot of our clients who have never been questioned before. This credit is an Earned Income Tax Credit. I have had people try to claim it with only 3500 in income. Why is the IRS not going after them? Could it be because there is no way they could pay the penelty and interest this woman who made a living could. Makes you think, doesn’t it. Maybe this woman should buy an apartment building and take several thousand dollars of write offs like the really rich people do.
And would you stop with the fair tax that is never going to happen because the really rich would never let that happen since they would be just a taxable as the rest of us.

By: Mrs Smith

Mrs Smith — Sat, 06 Mar 2010 13:11:22 +0000

I agree with many posts: that we don’t know the entire story here. Because of disclosure laws, the IRS cannot weigh in. Therefore the story is one-sided. The grandparents were certainly a factor. Porcaro paid a nominal amount for rent? Poof! Now her parents must be audited to verify the assertion and to ensure the income was reported on THEIR return. What did the rent include? What about personal living expenses? Did Porcaro receive child support (nontaxable)? I am, however, disappointed in the negative comments regarding the IRS. Auditors aren’t out to “get” anyone. They’re normal people like you and me. Their job entails enforcing the tax code, which is written and enacted by Congress. So if you’re unhappy with the Code, contact your Congressman and complain. That would be more beneficial than complaining on a blog.