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What should I do when I discover that someone (such as birth mother or father) is claiming my adopted child as a dependent on his or her IRS tax returns?

This experience is frequently reported to my office. The typical scenario: after the adoption is finalized, the adoptive parent files an income tax return listing the child as a dependent. Later (sometimes years later), the adoptive parent is contacted by the IRS or a state taxation authority and learns someone else also claimed the child as a dependent. This can happen if the birth parent knows the child’s social security number and sought a tax refund by falsely claiming to the IRS that the child was in that parent’s care. This can also happen if the child’s social security number is stolen (identity theft) and sold to someone who may be completely unrelated to the child.

Identity theft occurs when a person unlawfully gains access to someone’s personal information and uses it for their own financial gain. Children get targeted by identity thieves because of their clean credit histories. Children in foster care are at an even higher risk of becoming victims of identity theft because their personal information passes through the hands of many individuals. There does unfortunately appear to be something of a black market for social security numbers of former foster children.

If someone else claims a deduction for a child you have adopted, prepare for a long and aggravating process of proving when and where the adoption was finalized. The IRS may deny an adoptive parent’s claimed deduction while considering your evidence (proof of adoption). Expect delay in issuance of your tax refund. You may even be audited.

Some adoptive parents experience this problem multiple times over a period of years for the same child. In some cases, the adoptive parent can only put a stop to this by requesting a new social security number for the child. Sometimes the SSA refuses to issue a new number.

If you are an adoptive parent who has experienced this problem, please let my office know. We try to keep tabs on how common this problem is for adoptive families. You can also contact the police, the FBI and your congressional representative, because identity theft and tax fraud are federal crimes.