Tax Brake with Robert G. Nath, Esq.

The facts are so compelling that it makes you wonder why the IRS fought the case in the first place. According to the Tax Court, Rafael lived in an apartment with his three younger siblings. The father was an absentee, living elsewhere. Rafael was the sole breadwinner for the household, working as a salaried machinist. He paid for everything - rent, household bills. And, he made only $14,000 gross. Where was mom? She was suffering from cancer, relying on crutches for walking, relying on Rafael for transportation outside the apartment such as to clinics for cancer treatment and to relatives' homes.

Mom did not speak English, so Rafael helped his brothers and sisters with their homework and helped with discipline. He enforced the rules mom set for them.

Get the picture?

What did Rafael do? He claimed the earned income credit on two (not three) of the kids. What did the IRS do? They disallowed it!

So Rafael went to Tax Court - and won. You don't have to be the parent. You just have to have a “qualifying child.” To qualify, the child must meet a residency test, and age test and a relationship test. No question on the first two. As to the last, you satisfy the relationship test if the child is an “eligible foster child,” defined as a child whom the taxpayer cares for “as the taxpayer's own child.”

The Court had no trouble with that, either. And, after all, it's difficult to deny relief to a hard-working brother who cares for his sick mother when the father is absent. So if you have that type of situation, there is hope. Also, the case emphasizes that you don't have to be the parent of the child; other caregivers can qualify.