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Is this tax avoidance, evasion or neither?

Here's the scenario:

Mel encourages his mother to save most of her Social Security benefits so that he will be able to claim her as a dependent.

My guess is that it's avoidance, but I'm not sure what effect saving social security benefits will have on Mel's ability to claim her as a dependent.

Update:

So assuming that Mel covers her cost and she simply saves all of her social security benefits, would that qualify as Mel supporting his mother? If so, that means he can claim her as a dependent right?

6 Answers

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  • Bobbie
    Lv 7
    9 years ago
    Favorite Answer

    Neither when the mother does NOT have any other amounts of income and none is used for her support then should be able to use the worksheet that is in the instruction book for this purpose to get the correct answer for this purpose and time in your life.

    Publication 501 (2011), Exemptions, Standard Deduction, and Filing Information

    http://www.irs.gov/publications/p501/index.html

    http://www.irs.gov/publications/p501/ar02.html#en_...

    Exemptions for Dependents

    http://www.irs.gov/publications/p501/ar02.html#en_...

    All the requirements for claiming an exemption for a dependent are summarized in Table 5.

    The person's gross income for the year must be less than $3,800.

    You must provide more than half of the person's total support for the year.

    Support provided by the state (welfare, food stamps, housing, etc.). Benefits provided by the state to a needy person generally are considered support provided by the state. However, payments based on the needs of the recipient will not be considered as used entirely for that person's support if it is shown that part of the payments were not used for that purpose.

    Total Support

    To figure if you provided more than half of a person's support, you must first determine the total support provided for that person. Total support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities.

    Generally, the amount of an item of support is the amount of the expense incurred in providing that item. For lodging, the amount of support is the fair rental value of the lodging.

    Expenses that are not directly related to any one member of a household, such as the cost of food for the household, must be divided among the members of the household.

    Worksheet 1.Worksheet for Determining Support

    And you will have to do this worksheet for each one that you think that you might be able to claim for the support test and make sure that you do have the needed necessary written proof in IF and when the IRS might decide that they would want you to VERIFY the information that you entered on your correctly completed income tax return during the tax filing season.

    And you do have to sign the completed tax return where the below statement is included at bottom of the page of the 1040 tax form for your use at this time in your life.

    Under penalties of perjury, I declare that I have examined this return, and to the best of my knowledge and belief, it is true, correct, and accurately lists all amounts and sources of income I received during the tax year.

    Your signature Date Your occupation

    Spouse’s signature. Date Your occupation

    If a joint return, both must sign.

    Be sure that you do have very good detailed written records and a copy of the worksheet that you used to determine the amount of support that you and others paid for this purpose available in case the IRS should decide that they would want you to verify some of the information that you entered on your 1040 income tax return and printed a copy for your records and signed the other copy to send to the IRS for processing at that time in your life.

    Hope that you find the above enclosed information useful. 10/30/2012

  • ?
    Lv 4
    5 years ago

    To be deductible it must be postmarked via December 31, 2007. If it became no longer mailed or dropped on the charity via December 31, 2007 it is not deductible for 2007. A examine interior the quantity of $250 or greater could be recognized in writing via the charity. The charity could specify the date the contribution became made. If the charity specifies a date in 2008 and the return is examined, the deduction would be disallowed. i might say it somewhat is neither tax avoidance or tax evasion, it rather is sloppy recordkeeping that interior the long-term has little or no impact on the tax paid. The taxpayer is paying $250 and getting a tax income of below $a hundred, and probable might have deducted it interior here year.

  • Anonymous
    9 years ago

    If the IRS audits Mel, she'll show both that mom's savings went up by the amount shown *and* that she provided more than half of her total support.

    If mom's SSA benefits are $10K and Mel's income is, say, $40K, yes the IRS will believe it. If mom's benefits are $20K and Mel's income is $20K, the IRS probably won't.

  • rtfm
    Lv 7
    9 years ago

    In order to claim her as a dependent, she can't pay for more than half of her own support.

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  • tro
    Lv 7
    9 years ago

    when SS payments are made to seniors it is for their support and unless someone can prove they provide more than 50% of the senior's support, it would be assumed the senior is paying for his support

  • 9 years ago

    It doesn't matter if she saves all the money or not. She had the money to pay for more than half hewr own support. The IRS knows this, as they can see her SS payments.

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