We have our proof ready to send in, but the letter says to do nothing if we filed correctly. How long does the irs give someone to amend before they audit?
If you are in the right you need do NOTHING at this time ... depending on what happens with the other person who claimed your dependent this issue can take 2 years or more to resolve.
if the other person doesn't amend, you will get a 2nd notice from the IRS. That's when you provide your proof.
There is a way to split the tax benefits. For future negotiations with the other parent (and maybe even for the year in question) the following info may be of use:
There is a special rule in the case of divorced & separated (including never married) parents. When the non-custodial parent is claiming the child as a dependent/exemption/child tax credit; the custodial parent is still allowed to claim the same child for Earned Income Credit, Head of Household filing status, and day care credit. This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year; then only one of you can claim the child for any tax reasons. The tax benefits may not be split in any other manner.
Note in particular that the non-custodial parent can never claim the Earned Income Credit, Head of Household filing status or the day care credit, based on that child, even when the custodial parent has released the dependency to him on form 8332.
So, it's good idea to let the other parent know that you will be claiming those items, as many first time divorced parents are not aware of this rule and may try to claim those items, which will cause the IRS to send out letters.
how long it will take is unknown because it depends on whether the other party submits an amended return. if they don't it will take even longer. The IRS after waiting an unknown amount of time to the first notice will send out a second notice asking for proof. they will wait an unknown amount of time to receive responses from both parties. After that the responses will need to be manually evaluated. even if the other party does't respond, the IRS will still review your proof.
the problem is that there is no way to prevent this person for doing the same thing for 2019 unless the IRS bars the person from claiming the dependent.