E file rejected two years in a row

[Sloan52]

Hello, I am a single mother awarded majority timesharing and exclusive use of the jointly owned home in my divorce decree.  The court order specifically states the mother is the custodial parent for all state and federal purposes.  The parenting plan indicates the mother has 99% custody with restrictions imposed on father due to his substance abuse.  I have exercised 100% custody of the children since the divorce as the father failed to meet the drug testing requirements for the few days awarded to him.  In 2020, my taxes were rejected by e-file as someone claimed my dependents.  My ex admitted to claiming our children without permission when I contacted him by text message.  I paper filed and received my return (after a very long delay).  In 2021, my ex called by phone and asked to claim two of the children and I refused.  My taxes were rejected again by e-file as someone claimed my dependents.  My ex admitted by phone call that he claimed the children again even though he understood that he did not have permission from me.  I paper filed again and I am currently waiting for an outcome.  I just received a letter from the IRS for the 2020 filing (almost a year later!) indicating that someone claimed the same dependents as me.  I’m assuming it will take another year for them to contact me about the same issue for 2021!  My question, how long will this process take to resolve the issue for BOTH years, as my ex will keep doing this until there is a consequence.  Although I received my refund for 2020, I’m worried that my 2021 refund will be delayed even longer or perhaps frozen until this gets resolved, as I’m supposed to receive a significant amount and this is the second year this is occurring.  In the meantime, the delays in processing my returns each year causes significant financial hardship for me when I did nothing wrong.  Finally, what will the consequence be for my ex? Will he just get a slap on the wrist or will the IRS view this as fraud, which it is…as the court order and the timesharing is clear that I am HOH and am entitled to claim the children as my dependents and he admits to doing it without my permission.

[LeonardS]

Unfortunately, the IRS doesn't take your court order into account, unless it is dated before 2009. The IRS will award the dependency to the parent that files first and the second parent filing will have their return rejected as you have experienced.  Your only remedy against the ex is to take him back to court to resolve his violation of the court order.

[Sloan52]

I understand but in my case I AM the custodial parent AND there is no court order that says I have to allow the ex to claim the children in any tax year- therefore, it is crystal clear that the children are my dependents under state and federal law, as well as family law- there is just no disputing this.  Given this situation, will the IRS determine that my ex (noncustodial parent) committed tax fraud or tax evasion by claiming the children or will it simply be considered “negligence?”

[Cynthiad66]

@Sloan52 - You have options.  All is not lost.  The IRS has a system whereby you can contest the fact that someone else claimed a dependent that you feel you are entitled to claim.  It is a long process but well worth it because it will establish the rule for claiming the child.  You will need to print and mail your return to the IRS instead of e-filing.  Attach a letter of explanation then the IRS will do their investigation to award the dependent.

After a return claiming a particular dependent is accepted, any subsequent return that is electronically filed claiming the dependent will be rejected by the IRS. However, having an IRS accepted return with a dependent is not a confirmation that this taxpayer is qualified to claim this dependent. In other words, if you e-Filed your return with the dependents listed on your return, anybody else e-filing their return after you claiming the same dependent(s) will have their return rejected. However, if another return claiming the same dependent(s) is filed manually (mailed in), then the IRS will apply the tie-breaker rules (see details below).

There may be an exception when the splitting of tax benefits for a dependent is detailed in a legal divorce decree. If you have such a decree that was issued after December 31, 2008, you will need to file your tax return on paper and attach the relevant pages of the divorce decree, including the first page and the signature page. If the decree was issued before January 1, 2009, the IRS will not accept it. However, if you are a noncustodial parent claiming the child as a dependent, you have two options:

1. Multiple Support Declaration: To identify any other eligible person who can claim the dependent, you will need a signed statement from the eligible person waiving his or her right to claim that person as a dependent before you can add Form 2120, Multiple Support Declaration, when you prepare and eFile your tax return on eFile.com. If you already filed your return, you may need to submit Form 2120 via postal mail to the IRS. For situations where the same child may be eligible to be claimed as a dependent or qualifying child by more than one person, the IRS will apply a set of tiebreaker rules to determine who has the right to claim the dependent. Once the IRS receives both returns claiming the same dependent, they will use the tie-breaker rules below.
2. Release of Claim to Exemption for Child: You or the other party can transfer the right to claim a child as a dependent. To release a claim of a child as a dependent so that a non-custodial parent can claim the child, or to revoke a previous release to claim a child as a dependent, you can complete Form 8332, Release Revocation of Release of Claim to Exemption for Child by Custodial Parent. The Form 8332 can NOT be eFiled with your tax return on eFile.com. The non-custodial parent in this situation should also obtain a copy of the completed form from the custodial parent and attach it to their tax return, which they will need to paper file. If you change your mind at any time and wish to revoke your release of claim, you can simply file another Form 8332. Include Form 8453, U.S. Individual Income Tax Transmittal when you mail in your tax return with Form 8332 to the IRS.