Ok then that's a different problem. A child always reports their own income from working on their own tax return. However, if the child can be claimed as a dependent, they must check a box that says "I can be claimed as a dependent by another taxpayer" and they don't claim their own personal exemption. It sounds like your child did not do this.
If she can be claimed as a dependent, she will need to file an amended return. If she doesn't, the same investigation will happen and she will probably end up paying back part of her refund with interest.
She can be claimed by you as a dependent if:
1. she lived with you more than half the year,
2. she is under age 19, or a full time student under age 24,
3. she provided less than half her own financial support.
