Legal Question in Tax Law in Illinois

Re: Personal irs audit info

Unfortunately, audits can come up in a variety of ways.

If your sister wasn't working, what other possible sources of income did she have? Social security disability, unemployment compensation, maintenance or child support payments.

The IRS will look at ALL sources of income to determine support, whether they were taxable sources or not.

If you still believe there was not enough income from your sister to support the children, and that you provided over half, you will need to supply a listing of expenses that went to the kids over the course of the year, including indirect items such as rent or mortgage payments, etc.

Even though you don't have receipts, it is a given that children will need to eat, they need a roof over their heads, they need clothes, school supplies, medical costs, and miscellaneous other expenses.

If you have provided over half of this amount, and your sister's contribution was less than half, then I would say you have a case.

You and your sister could also sign a multiple support agreement that officially relinquishes her right to claim the children as dependents. This form is usually used when a number of people provide support to another person, but none of them can prove that they provide over 50%.

If the auditor doesn't agree with your position, there is always the right to appeal.

Good luck to you.