Mr. Kimble: Who knew this could happen to a guy like me? I mean they aren¡¯t even my kids, but I¡¯m paying for them. If this doesn¡¯t work, I may have to hawk my ride.
Preparer: Mr. Kimble? Been expecting you. Have a seat.
Mr. Kimble: I¡¯ll cut to the chase. I¡¯m looking for money, any kind of money you can get me back on my taxes.
Preparer: Well, let¡¯s walk through some questions to see if you can qualify for the Earned Income Tax Credit. Tell me about yourself, Mr. Kimble.
Mr. Kimble: OK, well, um, I¡¯m 25, I¡¯m single and I make $12,000 a year fixing bikes. I live to ride.
Preparer: And when you called, you said something about children at home?
Mr. Kimble: My sister¡¯s kids. Eugene, named after me¡ªhe¡¯s five, and Hannah¡ªshe¡¯s 4. They¡¯ve been living with me since last April.
Preparer: And did the kids live with any other family member for more than half the year last year?
Mr. Kimble: My sister and my mom, we all live in the same house together with the kids.
Preparer: And how much did your sister make last year?
Mr. Kimble: Hey, I thought you were working for me! What¡¯s with all these nosy questions?
Preparer: Calm down, Mr. Kimble.
Standard procedure. Nothing personal. I¡¯m required by law to meet certain due diligence requirements. You did get the brochure I sent you in the mail?
Mr. Kimble: Hummpf.
Preparer: The IRS can penalize me if I don¡¯t ask, so ¡
Mr. Kimble: OK. I guess you gotta give a little to get a little. I don¡¯t exactly know how much my sister makes. But she said it was okay to claim the kids.
Preparer: Do you know if she makes more or less than you?
Mr. Kimble: More. What difference does it make?
Preparer: It matters because the law regarding who can claim a child changed the last few years. Now, if a parent¡ªin this case your sister¡ªcould claim the children for EITC, but another adult who is not a parent wants to claim the kids¡ªthen your income must be higher than your sister¡¯s.
Mr. Kimble: Wait. I think I make more than she does.
Preparer: Mr. Kimble, I¡¯d advise you to check with her and make sure. If you claim the credit in error, you could be audited. That means you¡¯d have to pay back the money with interest and maybe some penalties.
Mr. Kimble: Great, there goes my bike.
Preparer: What?
Mr. Kimble to Preparer: I¡¯ll call her.
Preparer: Oh. Wait! Also ask her if she plans to claim the children for the EITC.
Mr. Kimble: Hey Sis. Hey, I¡¯m over here getting my taxes done. Need to know how much income you made last year. Hold up. Go ahead.
Sis: Almost $11,000.
Mr. Kimble: And are you sure you¡¯re cool with me claiming the kids for the EITC?
Sis: Yeah. Go ahead.
Mr. Kimble to Preparer: So, how much do you think I¡¯m gonna get?
Preparer: Well, let¡¯s go online and check using the EITC assistant. We¡¯ll finish your paperwork and then talk about your filing status.
Smith: Ok, numbers man. Whatever you say.
Preparer: I¡¯m sorry?
Mr. Kimble: Nothing.