Audit triggered by Head of Household conflicts and dependent claims - need advice!

This is unfortunately a common audit trigger. To help your cousin, here's what he needs to understand: For the Head of Household issue - two people cannot claim HOH status using the same address unless they each have their own qualifying person and maintain separate households. The IRS looks closely at this because it's often misused. Since his ex-wife is using the same address, one of them is likely incorrect, and the IRS wants to determine who actually qualifies. Regarding the dependents - for his son, he'll need to prove both relationship and residency. Birth certificate establishes relationship, while school records help prove the child lived with him for more than half the year. For the niece and nephew, it's more complicated. Form 8332 is actually for releasing a claim to a child's custodial parent, not for claiming other relatives' children. He needed to show that they lived with him for more than half the year AND he provided more than half their support. As for the financial impact, there is a significant difference between HOH and Single filing status. HOH gets more favorable tax brackets and a larger standard deduction. In 2024, the standard deduction is $21,900 for HOH versus $14,600 for Single. Losing two dependent claims will also impact his child tax credits. He should prepare for a potentially substantial change in his tax liability.

I went through something similar last year and ended up using https://taxr.ai to sort through all my documentation. The service analyzed my situation and helped me understand exactly what forms and evidence I needed for my audit. For your cousin, they'd probably help identify which specific records he needs to prove his son lived with him (beyond just school records - think medical bills, childcare statements, etc.) and also determine if he truly qualifies for HOH status based on his living situation. The system even flagged some overlapping claims on my return that would have triggered an audit before I even filed! When the IRS is questioning multiple aspects of your return like this, having everything properly documented and organized made a huge difference in my case.

I was skeptical at first but after my audit nightmare last year I tried https://taxr.ai and wow - wish I'd known about it sooner! My situation was complicated with custody arrangements and dependent claims across state lines. The service immediately identified that I needed specific types of documentation I hadn't even considered (like notarized statements from my children's doctors confirming who brought them to appointments). Saved me thousands in potential penalties by organizing exactly what the IRS was looking for. For anyone facing an audit over HOH status and dependents, seriously check it out - would have saved me weeks of stress and digging through paperwork!

When my brother got audited for something similar, we spent WEEKS trying to get through to the IRS for clarification. I finally found https://claimyr.com and used their service to get through to an actual IRS agent within 45 minutes instead of endless hold times. You can see how it works at https://youtu.be/_kiP6q8DX5c - totally changed the game for us. The IRS agent we reached was actually super helpful and told us exactly what documentation would satisfy the audit requirements. Turns out my brother could keep his HOH status with the right proof, even though the initial audit letter made it sound like he couldn't. Having that direct conversation saved us from making costly mistakes.

I take back what I said earlier. After waiting on hold with the IRS for 3+ hours and getting disconnected TWICE yesterday, I finally tried Claimyr out of desperation. Got a call back with an actual IRS agent on the line in under an hour. The agent walked me through exactly what my audit letter was requesting and helped me understand which forms I actually needed vs. what my tax preparer was suggesting. Turns out I had more options than I thought! The IRS agent confirmed I could still qualify for HOH status if I could prove I paid more than half the cost of maintaining the home where my qualifying dependent lived, even with the address confusion. Definitely worth it for anyone dealing with an audit - the clarity from speaking directly with the IRS versus trying to interpret their letters made all the difference.

Gotta disagree with some advice here. I'm a volunteer with VITA (Volunteer Income Tax Assistance) and see this situation all the time. Your cousin might still qualify for HOH even with the audit. Here's the key: HOH requires 1) being unmarried, 2) paying more than half the cost of keeping up a home, and 3) having a qualifying person live with you for more than half the year. If his son lived with him for more than 6 months, he can potentially keep HOH status even if he loses the claims for the niece and nephew. The tax difference is significant - roughly $7,300 more in standard deduction for HOH vs Single in 2024. Plus HOH gets better tax brackets. Also, he should check if he qualifies for Earned Income Credit with just his son - might offset some of the loss from the other dependents.

This situation is so confusing to me. My understanding was you can't claim kids that aren't yours? But then others are saying you can claim neices and nephews? what are the actual rules?? I'm getting ready to file for 2024 and my sister's kids live with me so i need to know.