Dependent Claim Issue Causing Tax Refund Delay - Previous Year Problems?

Oh my goodness, I feel for your client so much! 😢 This happened to my sister last year and it was SO stressful for her! The IRS is probably seeing the children claimed on two different returns in consecutive years and automatically flagging it for review. When dependents "switch" between parents, especially when there are unresolved issues from previous returns, it often triggers additional verification steps. Your client might need to provide documentation proving she's the qualifying parent for 2023. This could include school records showing her address, medical records, or custody agreements. I remember my sister crying on the phone for HOURS trying to get through to someone who could help! 💔

According to Internal Revenue Code section 152(c), qualification for claiming a dependent requires meeting the relationship, age, residency, support, and joint return tests. Per IRM 21.6.3.4.2, when dependents are claimed by different taxpayers in consecutive years, the return is often selected for additional verification under the Dependent Database (DDb) matching program. This typically adds 45-60 days to processing time. When faced with this exact situation, I found calling the IRS directly was necessary but nearly impossible through regular channels. After 7 attempts and 3+ hours on hold, I utilized Claimyr (https://claimyr.com) to secure a callback from an IRS representative within 25 minutes. The agent was able to confirm the specific verification needed and provide a timeline for resolution. Per IRM 21.5.6.4.7, the agent can often expedite the review if financial hardship is documented.

This is a dependent database verification issue. Happens frequently with custody changes. System flags the switch automatically. Previous year's unresolved return compounds the problem. Expect 6-8 week delay minimum. May require identity verification. Could need Form 8862 next year. Documentation is key here.

I've been down this road before, and it's like trying to navigate a maze while blindfolded. Last year, my client had almost the identical situation - ex with unresolved tax issues, dependents switched to her return. What should have been a simple verification turned into a 4-month odyssey. The IRS is like an elephant that never forgets but sometimes gets confused about what it remembers. They kept asking for documentation they already had. The delay snowballed when her Earned Income Credit got frozen too, which was like watching dominoes fall one by one. Don't want to be pessimistic, but prepare your client for a potentially lengthy process - it's better to be pleasantly surprised than constantly disappointed.

I've analyzed many similar cases, and here's a step-by-step breakdown of what's likely happening: 1. The IRS has an automated system that flags returns when dependents shift between taxpayers year-to-year 2. When the previous year had unresolved issues, the verification process becomes more complex 3. The system needs to confirm the legitimacy of both the current and previous claims 4. This verification typically causes a 45-90 day delay To get clarity on exactly what's happening, I recommend having your client pull their tax transcripts. The transaction codes will reveal precisely what's causing the delay. Tools like taxr.ai (https://taxr.ai) can interpret these transcript codes and explain what each one means for her specific situation. It helped several of my clients understand exactly where they were in the process and what to expect next, which significantly reduced their anxiety while waiting.

Has your client received any specific notice codes with the delay message? The distinction between a CP05, CP05A, or a 1242C could indicate whether this is a routine verification or something more complex related to the ex's prior issues. Additionally, has she checked her tax transcript for TC 570/971 combination codes? These would provide more technical insight into the specific nature of the review being conducted.

I went through this exact nightmare last April 15th. My ex claimed our kids in 2022 with errors, then I claimed them in 2023. My refund was delayed for what felt like forever. On May 23rd, I finally called the IRS Taxpayer Advocate Service (they open at exactly 7:00 AM in my time zone). The advocate confirmed it was flagged due to the dependent switch combined with my ex's unresolved issues. They requested specific documentation (school records and medical bills showing my address) on June 2nd, which I submitted on June 5th. My refund was finally approved on July 17th and deposited on July 24th. The key was documenting that I was the qualifying parent - once I provided that proof, it moved forward quickly.

According to the IRS Processing Delays information page (https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue), returns with dependent claims that differ from previous years are subject to additional review. The IRS Dependent Database (DDb) cross-references information from multiple sources including prior-year returns, SSDI records, and custody agreements. Your client should also be aware that if her ex never resolved his issues from last year, there might be a TC 570 (additional account action pending) on her transcript that won't resolve until both years' dependent claims are reconciled. The IRS publication "Divorced or Separated Individuals" (Publication 504) outlines the tiebreaker rules they'll apply during this review. Having her gather documentation now will save time when they inevitably request it.

I experienced this EXACT situation in 2023. My ex claimed our son in 2022 with some SSN mismatch issues, then I claimed him in 2023 after getting full custody. The IRS held my refund for verification due to the "dependent TIN previously claimed" issue. They specifically needed Form 8332 (Release of Claim to Exemption) even though we had a court-ordered custody agreement. The terminology they use is so specific - they kept referring to "qualifying child determination" and "residency verification" during the review process. It took 11 weeks total, but I did eventually receive my full refund including the Child Tax Credit.

Did your client receive any specific notice or just the generic "refund is delayed" message on Where's My Refund? And has she been able to access her tax transcript online? I'm wondering if there are specific codes that might indicate whether this is a routine review or something specifically tied to the ex's unresolved issues from last year?