A friend of my sister’s stole my children’s information and illegally claimed my children on her income Tax Return. I want to know how do I report this to the IRS? Someone told me tht I needed to complete a form.
The only thing you can do is file you taxes by mail claiming your children.
If someone else has claimed them as well, the IRS will send both parties a letter asking both of you to drop your claim if if you aren’t intitled to it. If both parties continue to assert the claim, the IRS will investigate and determine who gets the exemption. The losing party will have to pay the extra taxes plus interest and potential penalties. In this case, the IRS may also pursue fraud charges. However, since tax returns are confidential, the IRS will not tell you who the other person is who claimed your children as dependents.