sheesh3[at]yahoo.com wrote:

- quote -

Having missed the earlier messages in this thread and
therefore not being sure of the specific facts of this
situation I still say, don't be too quick to apologize. You
should reserve the right to say things like "smells like
fraud to me," when it does, in fact, smell like fraud.

As you acknowledge in your post, arranging one's affairs to
pay the legal minimum in taxes is not fraud. At the same
time, arranging one's affairs to cover up the fact that one
is illegally evading taxes would be fraud. There is a lot of
gray area; that's why we all are still learning not just the
newbies.

Regards,
Bill
~~~~
Associate Professor of Accounting
Longwood University
Department of Accounting, Economics & Finance
http://www.longwood.edu/staff/wpbrown/
Opinions expressed by me are mine, not my employer's.

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- quote -

After receiving some email about my use of the word fraud
above, I want to apologize, and post some clarification.

As I am sure many of you have realized, I am new to this.
This is obvious both in the lack of initials after my name,
and I am also sure in the quality of my comments. I have
also come to realize that there are two issues at play here.

First, the word fraud has very different meanings and
implications for those who are in fields such as accounting
or tax prep than for those who don't. Being new to this (I
am doing tax prep for pay for the first time this year, and
am debating getting my Masters in Accounting), I still use
the word like a non-accountant/tax person.

Moreover, it has truly sunk in now, how "gaming the system"
or more properly "arranging ones affairs in whatever legal
manner one desires so as to minimize tax" is valid and a
goal here. This would of course include explorations of
ideas such as this. Up until now this kind of activity has
been frowned upon or looked down upon in other professions I
have held. There are certain fields where this simply isn't
tolerated.

I hope this makes some sense. I was in no way trying to
imply a negative motivation on the part of any of the
posters, and hope that no one was offended by my comment.

bex

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- quote -

I've done further research into this, and am in agreement
with the general posts that you can't swap...however, I want
to amplify Art's comments that if two MFSs can swap--those
Ohio people are going to rake this in.

I believe that a MFJ can switch to MFS and will get a net
$200 child tax credit. As each spouse is deemed to have
received 50% of the Advance Child Tax Credit. Note this is
$400 for 2 kids...

Charles Markham, EA

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"Alias Fanatic" <markham[at]primushost.com> wrote:

- quote -

Given your disclaimer, I will simply say, smells like fraud
to me. Now for a question.

- quote -

Where did you find this out? I deal with a lot of low
income TP's and for the ones that actually got the Advanced
payment (liability issues for most), many only got it for
one child. Since it doesn't matter which child they got it
for, why would the payments be coded?

Finally, I would propose this reverse question to you.

Given a divorce couple with two children of different ages.
The decree states that they each get one of the kids for tax
purposes each year, but must swap kids every year, to handle
the situation when one of them ages out.

If those folks walked in your door, would you state they
they get the bonus $400 you are creating in your scenario?

bex

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Alias Fanatic wrote:

- quote -

Dear Alias, aka Charles.

Where have I seen this before? lol. anyway.

As I posted elsewhere about a client who is claiming his
grandchild this year, for whom his daughter (also claimed
this year) and her husband got the 400 for the grandchild,
the efile was accepted as filed.

I'm going to try to remember tomorrow to check status of
that large refund for the client. If the refund amount
matches what we sent in, then the 400 $ payment will not be
linked to the dependents ssn.

Will keep you posted.

Cheer$,
Harlan Lunsford, EA n LA

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Alias Fanatic <markham[at]primushost.com> wrote:

- quote -

Good try, and I like your thinking. But, sorry, it won't
work.

The 2002 advance tax rebate was based on both the taxpayer
and the child, but the adjustment to the 2003 Child Tax
Credit Worksheet follows the taxpayer only.

On the Worksheet you enter the total amount of tax credit
You received, without reference to which child(ren) it was
for.

====

Now for Ohio and some other taxpayers who choose to file MFS
to reduce their income taxes, if TP claimed the kids last
year, then SP would claim this year, and rake in the full
1000/kid.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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"Alias Fanatic" <markham[at]primushost.com> writes:

- quote -

No. See the child credit worksheet in the 1040
instructions. It's not child specific, it's just the number
of qualifying children claimed.

Phil Marti
Topeka, KS

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Disclaimer: Before anybody gets high and mighty
about this, remember our goal as taxpayers is to
obey the law but to get our clients the best refunds.

Given that--does this scenario work?
************************************************** ***********

A divorced couple on friendly terms has a divorce agreement
that they each claim one kid. (They have two.) Let's say
the divorce agreement specifies that the Father gets the son
and the Mother gets the daughter. (Both kids live with mom,
she's HOH, he's S)

Each of them got the $400 tax "pre-bate" this past summer.

For 2003, can't they agree to each claim the OTHER child
(Mom claims son, and Dad claims daughter)--and each of them
gets an additional $400?

This is really two questions:

First, I think the $400 payment is "linked" to the
dependent's SSN--not only to the parent. Since the $400 is
"non-recoverable", this allows the opposite parent to get
the $1000. Right?

Secondly, assuming the first question is affirmative, does
the divorce decrees instructions bind them from a tax
perspective, as long as there is no conflict between the two
of them, can't they do this? Is this legal?

By the way, I have already floated this by one client--it
occured to me today--and it is clear to me that the level of
cooperation and trust between the two parents must be
extremely high! So, this gambit will be rarer to pull off
than you might think.

Charles Markham, MST, EA

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