How to Prove Your Right to Claim a Dependent on Your Tax Return If You Are Audited

If you meet the IRS requirements for claiming an exemption for a dependent on your income tax return, you do not have to provide proof that you qualify for the exemption. But there are cases in which another person may claim the same dependent on his or her tax return. For example, your former spouse might claim your child as a dependent. Or someone you claim as a dependent may claim a personal exemption on his or her own tax return.

As pointed out by William Perez in an article on About.com, IRS computer systems will detect a duplicate claim for a dependent. The IRS will attempt to determine who is not entitled to claim the dependent exemption and will send a notice to that person. If the IRS cannot determine who is entitled to the exemption, it may select one of the returns for audit. If you are selected for an audit, you will need to support your claim for the dependent exemption.

If you receive a notice from the IRS, you should follow the instructions carefully and provide the specific information or documentation requested. Generally, to prove that you qualify to claim a dependent exemption, you would have to show that you meet the requirements. First, the person you claim as a dependent must be a "qualifying child" or "qualifying relative". The person must be a U.S. citizen, a U.S. resident, a U.S. national, or a resident of Canada or Mexico. There are certain exceptions for adopted children.

To be your dependent, a qualifying child must have lived with you for more than half the year, with certain exceptions for children of divorced or separated parents or parents who live apart. And you would have to show that you provided more than half the child's total support, again with some exceptions. For an explanation of all the requirements for claiming a dependent exemption, you can see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information.

According to the Internal Revenue Manual, acceptable documentation to prove a relationship as a qualifying child includes a birth certificate, marriage certificate to verify your relationship to the child, or a letter from an authorized adoption agency.

To show that a child lived with you, you could provide copies of school, medical, childcare provider, or social service records. Copies of school records can also be used to show that the child was a full-time student if over age 19 but under 24.

If the IRS requests documentation of the support you provided, you could show receipts for food, clothing, rent, medical and dental care, schooling, recreation, and personal items. If you own your home, to show the cost of lodging, you may need to provide a statement of the fair rental value of your home.

If you are divorced or separated and are the noncustodial parent, you may still be able to claim an exemption for a dependent child if you meet the requirements. The custodial parent must complete and sign Form 8332, agreeing to release the claim to exemption. You should attach a copy of this form to your tax return each year you claim the child as a dependent.

Sources:

Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent

Internal Revenue Manual Section 4.19.14.5.7, Personal Exemptions and Dependents, IRS

Publication 501, Exemptions, Standard Deduction, and Filing Information, IRS