My wife lived with me until 7-11-2021 she left and filed separately and claimed the kids and she hasn't worked in 2 years? She lied and now I'm screwed.

[matt353153]

She had zero income he was on workman's comp and because the child tax credits this year do not require income she filed behind my back claiming the kids for the full year and I had all of them as my dependents for over half the year what do I do I know I'm supposed to contact the IRS but I don't know how?

[Critter-3]

Sorry ...but if both parents file a separate returns then the IRS applies the tie breaker rules and the winner is the parent with whom the child lived with the most during the year.  So if she left and took the kids then the kids `lived with her more than you ... so if you try to file a return and also claim the kids then prepare to defend your position in a year or 2 when the IRS sends  both of you a notice.  

[Critter-3]

But, there is a way to split the tax benefits. For future negotiations with the other parent (and maybe even for this year) 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 exemption to him.

 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.

Ref: https://www.irs.gov/publications/p17#en_US_2017_publink1000170897

Scroll down to "Children of divorced or separated parents (or parents who live apart)"

** The IRS goes by physical custody, not legal custody, for who is the custodial parent.  Furthermore, for tax purposes, there is no such thing as joint custody, regardless of what your legal agreement says. The requirement, to be custodial parent, is that the child live with you MORE than 50% of the time. One of you has to be the custodial parent and the other the non-custodial parent. The IRS goes by physical custody, not legal custody. 

[Mike9241]

if you go through the formality of divorce, some people don't, the court could award you the right to claim the children for tax purposes even though you don't have custody.  The IRS will recognize this only if the custodial parent provides the noncustodial parent with form 8332.  this form must be signed and dated by the custodial parent and the noncustodial parent must attach the form to their tax return every year to claim the children. 

mention this to your divorce attorney because sometimes the ex refuses to comply with the court order. the IRS won't care. no 8332 you lose. 

[Hal_Al]

@matt353153 said " I do I know I'm supposed to contact the IRS but I don't know how?"

That's not correct.  If someone else claimed your child inappropriately, and if they file first, your return will be rejected if e-filed. You would then need to file a return on paper, claiming the child as  appropriate. The IRS will process your return and send you your refund, in the normal time. Shortly (up to a year) thereafter, you'll receive a letter from the IRS, stating that your child was claimed on another return. It will tell you that if you made a mistake to file an amended return and if you didn't make a mistake to do nothing. The other party will get the same letter you did. If one of you doesn't file an amended return, unclaiming the child, the next letter, from the IRS, will require you to provide proof. Be sure to reply in a timely manner.

Winner gets the tax benefits; loser gets to pay the IRS back with penalties and interest.  As others have already said,  The custodial parent almost always wins. The IRS goes by physical custody, not legal custody. The non-custodial parent can only claim the child as a dependent if the custodial parent gives permission (on form 8332) or if it's spelled out in a pre 2009 divorce decree.   

Even if a divorce decree, dated after 2008, gives the non-custodial parent the right to claim the child, he must still get form 8332 from the custodial parent. A properly worded decree should require her to provide that form. https://www.irs.gov/pub/irs-pdf/f8332.pdf