Mother fraudulently used Credit

I believe so. It might even be 2/15 for investments. I haven't gotten all of mine yet.

I do know that it's 1/31 for W-2s.

You might call the brokerage and ask if they know when the mailing date is. If it's a big brokerage, they are probably centrally processed and won't be sent until the end of the month. They can't compute all of the figures until the year closes, unlike salary, where the last payday could be in the middle of the month.

 

I don't think anything regarding your income matters if you are applying for a federal stafford loan. You can have a million in the bank and still get it, but as far as the tax information, I know you have to file different information on you fafsa application if you are considered independent or a dependent of your parents.

 

That is sad but true. But I know they passed a law (at least in Missouri, where I'm from) that puts a limit on how many children you can have just for that purpose. I think after five kids, you don't receive any more benefits for anymore.

Looks like they would have made it two or something. Five is an awful lot of children just to try and get more money.

 

I would first try for scholarships and conventional loans. From what I've researched for a friend of mine who's a public defender and can't pay his loans, he can even lose his license if he doesn't pay. Imagine that! These student loans seem to be horrible if you can't pay them. There's a whole different set of laws, all to protect the lender. If you don't find an excellent job, you're a slave for life with a student loan.

 

It's true that student loans must be paid and they never go away. You don't even lose them in bankruptcy. That's a big draw back if things should go belly up. But, they are really easy to get with little or no credit experience and the interest rates are very low. If you're young with a limited credit file it would be hard to get a private loan at all, much less at such a good interest rate as the federal student loans.

Grants and scholarships definitely are the way to go, if you can qualify for them and if they are available. They don't have to be paid back.

My best advice for student loans is: Don't go too crazy in the amount you ask for in the loans. It's tempting to add on stuff so you can get an awesome computer or whatever. Try to take out as little in loans as you can to get by. I guess that's only common sense, but I overdid it myself and I now have the loan payments to prove it!!

 

If C mom hadn't of claimed her on her tax return

I will reiterate that the student loans are the last thing that C would have had to tap into, if her mother had not claimed her on her tax return. With C's limited income and prior full time student status, she could have filed her own exemption which would have qualified her for state tuition assistance and pell grants along with scholarships and other items. The stafford loan would have been to close the gap on funding for her school

Her mother killed that by ammending the return which has caused C to request loans that will be over 85 to 100% of her education funding. If C was under a certain income limit, she would even qualify for the earned income credit and the possible tax rebate that is being kicked around in congress right now.

So her mother's actions have far ranging implications for C beyond the brokerage accouint.

Let me check and see what is the deadline for 1099's.

 

what a mess, i've read a story like this before, i think this could be a growing problem and some kids suffer in silence because they don't want to put their parents in jail. In this situation however, i'd have no option but to report her, its very selfish what she did to C!

 

Is there any way that C can go back and file and get her mother's returns declared fraudulent? If C can prove the she didn't live with Mom, wouldn't the IRS then disallow the exemption for mother?

Sounds like she did file her own return for 2006. Mother fraudulently amended it.

If the CPA was involved in that transaction, I'd go after him, too. I believe that he has a duty to verify certain data. If he signed as a paid preparer and the IRS pays him a visit, he may change his story.

 

The scenario is like this..

C can ammend her 2006 tax return once she sees the transcript and the copy of her 2006 tax return along with the ammended. She will need to file this along with a statment that the original ammended return was done without her permission.

The IRS will pull up both returns (c's and her mother's) to determine what the original return for C implied and what the ammended return implied for her mother. This causes an audit (mom has to start coughing up receipts, tuition bills, housing payments, etc for C) she is now at the point that she has supplied more than half of C's support. The problem for C's mother is if C earned over 3300 in income for the year. If C earned more than that, can show that she lived in a seperate residence, has receipts, (credit cards, food bills) then her mother is screwed.

The IRS auditor may go back to the last 3 years worth of filing, this would begin in 2004-2006 to look at what shenanigans her mom has been doing. See, if the mother was moving money out of the brokerage account and stating that the money used was for C's living expenses, then obviously she was not supplying her support. This causes an a glitch in her filing. She should have declared C's money on her tax return if it was over 1400 and taken the deductions. With a trust being used for C's support and tapped into over the years and with the estimated interest income from the account, C would be what the IRS would call and Trust Fund Baby.

These are people who instead of having 1099-MISC for reported income, they have 1099-DIV income reported. The reported income was and is under C's social security number and therefore someone has to report this for her. I bet bottoms for dollars that the mother, the dopey CPA and the grandfather did not realize that if the money was used for the mother's extravagant lifestyle, the IRS can conceive that the Trust was an illegal tax shield for the grandfather and the mother.

I would let the hound dogs from the IRs work your mother over. All you have to do is file your ammended tax return, wait 90 days, call the Taxpayer Advocate and give your position. Normally, it works in your favor and the money that was submitted to the IRs for you deficiency, well, chalk it up to one one-hundredth of the money that your mother owes you.(+interest)

Remember, bureacracy is there for a reason and big brother has a record of all of your income information dating back to 7 years from now. So if you want dear ole' mom to piss her pants, just get the IRPTR (Income Reports) for C dating back to the earliest tax year that is on the system. She is a principal now and can request this information.

Ask nice and ask the representative what the earliest income information reported for you. It may go back to 12/31/2001 -12/31/2003 is my best guess. I believe that the statute is blown on items that have not been filed since 2001.

 

All income forms must be mailed by January 31st, the only exception is for IRA accounts, as you can wait until May to actually make a deposit, and include it in the previous years tax return.

 

What about the years she did have knowledge of her mother claiming her as a dependant and did nothing to report it?

 

Can't thank you enough...

Hey everyone! I just wanted to give an update and let you know what's been going on. As of yesterday I sent out a letter to my parent's CPA to request the copy of the return and let him know that I did not authorize the amendment on my taxes. I have also spoke with the IRS and (as you mentioned Collector) I was advised to amend the 2006 taxes again to keep the records straight.
I have also gone to my grandmother's recently and she gave me my five 1 oz gold pieces that had been put away for me when I was born. She has been like a guardian angel to me. When I asked her about the gold she told me over the phone in a whisper that she had been keeping it in her closet!! Scary thought I know, but she said she was too afraid to open another deposit box that my grandfather might find OR keep it in it's existing deposit box because MY mother had been asking her about taking it out to use for "my brother". riiiight! Anyway...I have placed that in a deposit box of my own and it's safe now. Do you report gold on your taxes??

Magi...I thought about what you said in regards to previous years being claimed by my parents when I shouldn't have been. The only other year I would've been eligible to have claimed myself would have been 2005. So I'm assuming I will get in trouble for not claiming myself then. Thank goodness I did start filing for 2006 though. What kind of penalties will I receive for that? I just wasn't aware of my financial standing in the big world of taxes, but I know that ignorance is no excuse.
As you all can probably imagine, this has been a very bittersweet situation for me. Bitter because it is so overwhelming to take on so many areas of financial abuse and such broad topics that I am so clueless about. But it's also been sweet because I am gaining independence, knowledge, and a sense of justice. Today I picked up a free 1040 booklet and I've been reading as much as possible to prepare myself for what could come up later.
I haven't received my 1099 or W-2's yet, but as Bizwiz said they should be coming soon. I'll be making phone calls anyway to make sure people don't forget about C! lol If there's one thing I've learned in this forum it's how to get people to help you, whether they like it or not.

I can't think of anything else at the moment, but thank you again for all your posts!

 

I thought of something else...

If there is a rebate for 2006 taxes are my parents going to get that? If you're wondering where that came from...I just read this article.
http://www.npr.org/templates/story/story.php?storyId=18375394
I'm not sure if that applies to 2006 or just 2007, but just curious.

Also is it a better idea to file with someone like H&R or should I use the free EZ file option online?

 

If the value of the gold is less than $10,000.00, then it should be considered a "gift" by both you, and your grandmother. A "gift" is NOT taxable unless over $10,000.00. So, you are okay here on the gold. However, (mark this down), IF you ever sell this gold at a price higher than $10,000.00, then the "gain" is taxable. As a note, (if you sell the gold), any transaction over $10,000.00 is recorded and forwarded to the IRS.

If you are concerned, you can still file an "amended return" for 2005. Request a copy of your parent's 2005 return, and file accordingly. I don't think you will run into any issues with the IRS (penalties, interest, etc.) as technically you did file (under your parents). THEY are the ones who misused you as a tax deduction. Actually, you will probably get a refund (with interest).

 

I would recommend one of the free EZ file options on the IRS website, your situation is fairly simple, and your taxes should be straightforward. Save the money...

 

ummm, it may be a bit more complicated

If she is receiving 1099-div from the annuity or trust, she may be required to file an 1040 (long form) Her situation on the surface seems uncomplicated, but it is not. 1099 people normally have to file 1040's.

As far as the rebate, the devil is in the details. It may be based on 2007 income reporting and not 2006. For 2005, you can still amend it to take your own personal exemption.

 

I aoplogize for not being clearer, when I recommended "EZ file", I was only referring to the e-file options on the IRS website, not the 1040EZ form of filing.

C would most likely have to file a 1040 (long form), but the 1099-DIV (on a Schedule B) would be the only other thing besides any W-2 forms different.

The difficult part would be determining whether the distribution was a "gain" or principal amount....considering the history here (or lack of..), C may not be able to tell. We also do not know the what actually made up the distribution from the trust account (i.e. interest, sale of security, dividends, etc.).

 

Just a little quote from a book I study called A Course In Miracles...

Whenever you are angry, you can be sure that you have formed a special relationship which the ego has â??blessed,â? for anger IS its â??blessing.â? Anger takes many forms, but it cannot long deceive those who will learn that LOVE BRINGS NO GUILT AT ALL, and what brings guilt CANNOT be love, and MUST be anger. ALL anger is nothing more than an attempt to MAKE SOMEONE FEEL GUILTY, and this attempt is the ONLY basis whichthe ego accepts for special relationships. Guilt is the only need the ego has, and, as long as you identify WITH it, guilt will remain ATTRACTIVE to you.

 

I am not "the freebie child"...

I finally had the chance to sit down with my mom and stepdad to "talk business". I was on my way to pick up my little brother for an outing when I got a phone call from my mom, her voice in a higher pitch than usual, asking about tax information. This was different from the emails though because she was much more frantic. I told her that we could talk about it when I got there...
I pulled in the driveway and before I was even out of the car my mother came bounding out the doorway with a giant bag of "goodies" to give me. I knew that she was sweating it because this was good stuff...normally I get a handbag or some school supplies...a magazine...whenever she feels guilty for being a bad mother. So I was ready for it.
As she leaped into an explanation as to why I should let them claim me on their taxes I stopped her and said, "why don't we just go inside and talk about this...instead of discussing it in the front yard". She agrees and we walk inside where I see her husband(we'll call him P). I plant myself in the chair directly across from him and I was ready for battle. The first thing he says is "We've talked to our cpa and he says that it would be much more beneficial for us to claim you, as we will receive a $2,000 deduction with you as a dependent and you would only get maybe $100.00 back as an independent. If the hundred dollars means that much to you I'll just write you a check right now." I look him in the eyes and calmly say, "P, that's not the point at all. I have paid far more than 1/2 of my expenses with no help from you at all and I have the right to claim myself. Why would I basically give you $2,000 when you have done nothing for me?? I am going to file independently...as I did last year..." For ten minutes he tried to explain to me how much more beneficial it is for them and was VERY forthcoming that he was desperate for the deduction, but I countered every sentence with the facts...pinpointing that he only helps with very minor finances and that LEGALLY he can't claim me.
This is where P got VERY flustered. He threw out, "Well C, you're not gonna like it when I say this but...I'm not paying for ANYTHING ever again if you go through with this. You can pay your medical and car insurance from now on"
Of course I had expected this so I calmly shook my head in agreement and said that was fine and I had already been researching it.
Well throughout the conversation they continually reiterated how much better it would be FOR THEM if I would let them take me as a deduction...as if I should care??? While my clueless mom was in the background pleading with me not to be mad at her.
I also asked questions about how they had changed my taxes and never said a word to me. Their replies were that their cpa had done all of this on his own and all they did was write a check to fix what had "gone wrong". Well this in itself was a huge mess because they obviously KNEW what was going on if they signed a check to "fix my taxes". Then P offers me his cpa's phone number, so that I can "call and talk it over with him" to which I replied, "Oh, there's no need...I've already sent him a letter". This of course sent a shockwave through the room. They couldn't believe that I had followed through. then P says, "Do you really hate me this much?? Is that why you're doing this?". I couldn't believe this was even being brought up and I knew it was time to get out of there, but not before I said some final words....

The end of the conversation was probably the most vindicating part. P had mentioned that I shouldn't need their help because, "I have the trust account". And I said, "Just because I have some money you have always thought of me as 'the freebie'...you know the child that you never have to put anything into, but you gain thousands from." P sat silent and I ended it with some southern charm and a big smile saying, "Well I'm so glad we could have this talk! Now I feel like everyone's on the same page! I better run..."

I just want to say thank you to this credit board for preparing me with the tools I needed today...6 months ago I could NEVER have gone through with this. Today I had solid facts to counter all the manipulative words coming from their side...I knew that I was right and they couldn't shake me. It was an incredible feeling to be so knowledgeable in an area that only months ago I knew nothing about. I know that there is a lot more to come from all of this, but today felt like I was taking a HUGE first step. I was reclaiming my right to be recognized as a valuable and worthy person..saying you're going to HEAR ME today because I won't be the victim that you have tried to make me.