No, your return will not be immediately rejected. You will need to ask the person who might have claimed him IF your nephew was claimed. If that is not an option and you claim your nephew along with someone else, the first person to file their tax return that claims the boy will probably get their refund. The second person to file their return will get notified that the dependent was already claimed and will not get a refund. The first person will get notified as well and you both will have to go through an audit. Both of you would have to prove WHY you believe you have the right to claim the boy. They law (either by IRS code or court order) will determine who has the right to file with your nephew as a dependent. The person who doesn't have the right (in the eyes of the law) will have to amend their return and may be penalized.
