An all-too-frequent situation at tax time: you go to file your taxes electronically, and the IRS rejects your tax return because someone else has already claimed your dependent.
You cannot find out who claimed the dependent: the IRS won't tell you because of the strong regulations protecting the privacy of tax information. However, you will probably have a good idea of who might have claimed your dependent: that person would need to know the dependent's name, Social Security number, and date of birth. About.com reader Autum3320 figured out that her ex-husband claimed their daughter, for example, and now she's ready to fight back.
What you should do is review the criteria for claiming a dependent. One of four crucial eligibility criteria is the residency test: for more than half the year, the dependent must have the same residence as you do. This test can be overridden only if the custodial parent releases his or her claim the dependent using IRS Form 8332.
If you are eligible to claim the dependent after reviewing all the criteria, then you should claim the dependent on your tax return, and file the return with the IRS. You will have to mail the return to the IRS, however. "Unfortunately, some returns cannot be e-filed. This is one of those cases. When two taxpayers claim the same dependent, the IRS will require that each taxpayer provide proof as to their right to claim the dependent. This takes time to sort out. Meanwhile, file your return claiming the dependents you are entitled to and if the return is rejected, file it by mail," states Kris Siolka, EA from the National Association of Tax Professionals.
You should be prepared for an audit over the dependents. The IRS will audit both your tax return and the return of the other person who claimed the dependent. The IRS will ask questions and seek documentation based on the eligibility criteria and the tie-breaker tests. You can find extensive information in the exemptions for dependents section of IRS Publication 501.
To prepare for the eventual audit, you should gather any and all records indicating that the dependent lived with you, such as school and medical records. Having these records will go long way towards winning the audit and protecting your refund. You can read more about how the audit process is conducted and your rights to appeal a decision in Publication 556. You should be aware of all your rights as a taxpayer, including your right to seek assistance from the Taxpayer Advocate Service. You may be eligible to receive free or low-cost representation from publicly-funded tax clinics.