If this is a case of some other known person, claiming your and/or your child's tax exemption, rather than actual identity theft, it should be handled differently.
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. The
custodial parent almost always wins. 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.
