Kidnapping & The Tax Code

Hi Readers — Here’s a note I just got. Really, really strange!

Dear zzyzfbsykn
Free-Range Kids: Totally off topic, but as I was wrapping up my taxes last night, I saw (on p.22 of the 1040A instructions) this little gem:

“If your child is presumed by law enforcement authorities to have been kidnapped by someone who is not a family member, you may be able to take the child into account in determining your eligibility for head of household or qualifying widow(er) filing status, the dependency exemption, the child tax credit, and the earned income credit (EIC).”

You mean if my kid is kidnapped I can still claim a child tax credit? Well now I don’t feel so bad!

No, seriously (sort of):  The IRS thinks stranger-kidnappings are so common, they must be written into the tax code, like business lunches? That is an agency pretty out of touch with reality. But I guess we knew that… — Lenore

42 Responses to Kidnapping & The Tax Code

  1. Peter Orvetti April 14, 2010 at 4:33 am #

    So if your child is kidnapped by someone who IS a family member, you lose the tax credit?

  2. vespabelle April 14, 2010 at 4:34 am #

    The information is there because there was a specific case in Tax Court. You can read about it in this article: by David Cay Johnston (an excellent tax reporter.)

  3. Andromeda April 14, 2010 at 4:55 am #

    The IRS has a form you can fill out so that, if you’ve taken a vow of poverty, you don’t have to file taxes (and another form you can file if you abandon your vow). The IRS has special rules pertaining to income from the sale of fish. The IRS has distinct rules for winnings from Indian, and non-Indian, gambling. I do not think *commonness* has anything to do with what gets into the tax code.

  4. Andromeda April 14, 2010 at 4:55 am #

    (I am not an accountant. I just ran into these one year when trying to figure out how to deal with three figures of ()%*( royalty income.)

  5. pentamom April 14, 2010 at 5:12 am #

    I’m with Andromeda. No one has to assume it’s about being common. It’s about how to handle it, when it happens. Even though it’s a one in many million things, there still has to be a right or wrong answer how to handle the situation for tax purposes. And in order for there to be an answer, it has to be written into the code.

    It’s not like it’s in the 1040 instructions that (used to) get mailed to your house.

  6. Jay April 14, 2010 at 5:28 am #

    There is also code about what the donation to goodwill (or a similar charity) of a pair of socks is worth.

    As an accountant I can guarantee that tax code and common sense have no relationship to each other… in your country or mine.

    And the above comment about having a “right” and a “wrong” way to deal with ANY event is exactly correct.

    You know there are even right and wrong ways to claim the income, and deduct the costs you incurred to deal drugs? You did know you were supposed to report those earnings right? LOL. That is what Al Capone went to jail for you know… tax evasion…. not rum running, or murder!

  7. SKL April 14, 2010 at 5:36 am #

    This was to provide clarity for families who are still hoping their missing child is alive, but have no proof of it. Basically to stop the IRS from coming in and saying “stop lying to yourself, admit the kid is dead, and pay up.” Which I understand actually happened. As others have said, it doesn’t have to be common to make it into the tax code.

  8. Uly April 14, 2010 at 9:18 am #

    It’s the IRS. They have rules covering EVERYTHING.

  9. Donna April 14, 2010 at 9:32 am #

    Many strange, albeit funny, laws come into existence due to a one-time random event. For example, it’s against the law (or used to be) in San Diego to shoot whales from the trolley. I don’t think that was a common occurrence either (I’m not even sure how it would be achieved) but someone did it, someone in power was outraged and it became a law. It doesn’t surprise me that the tax code is full of little gems such as this.

  10. Angeline April 14, 2010 at 9:33 am #

    My husband just shook his head and said, “I’d go to prison before being concerned about tax credits while my child was presumed kidnapped.” (But SKL’s comment has a point. The IRS has to be prevented from being even more offensive than its existence already is.)

  11. pentamom April 14, 2010 at 9:57 am #

    I don’t think the point is that people sit around and worry that they might lose a tax credit for their kidnapped child.

    The point is, even parents of kidnapping victims have to fill out their 1040s. And when they get to the question asking “Did your child live with you the entire year,” there has to be a right and valid answer to that question in such an anomalous situation. It’s not about caring more about your tax refund than your kids, it’s that legally, the IRS has to have a definite standard in the situation.

  12. pentamom April 14, 2010 at 10:01 am #

    My bad — it IS on the general instructions that get sent out. Okay, that seems kind of excessive. You’d expect it to be buried in the code so you’d have to go ask your lawyer what to do (and in that situation, you’d HAVE a lawyer.)

    So I guess it’s not so much that the rule exists, it’s that they put it in the general instructions, which are intended to cover common situations.

  13. bmj2k April 14, 2010 at 10:16 am #

    Wow! With so many rules that cover so many situations, the IRS must be a model of good government!

  14. SKL April 14, 2010 at 10:17 am #

    Can you just imagine having to go to court to prove you have a right to act like your kid hasn’t been murdered? I seem to recall reading that the parents presented evidence of how much they had spent toward the efforts to try to get the child home, whether or not they still had a bedroom for him should he ever return, etc. What the IRS won’t do to shake us down for a few extra bucks. GRR!

  15. Frau_Mahlzahn April 14, 2010 at 2:53 pm #

    This is just absolutely sick!

    So long,

  16. Nikki April 14, 2010 at 3:49 pm #

    Check out this article! And in my home town *sniff*

    Good on these kids 🙂

    Here’s another article, one of the councillors wants to make it safer –

  17. pentamom April 14, 2010 at 8:15 pm #

    “Wow! With so many rules that cover so many situations, the IRS must be a model of good government!”

    Nope. They’re a model of what government is. That could be good or bad. But the best government has to have rules to cover every situation, or there’s too much danger of arbitrary unfairness in applying vaguer rules. The thing is, having all those rules doesn’t MAKE it good government. They can still BE arbitrary, it’s just that without clear rules, they can’t be anything else.

  18. Sean April 14, 2010 at 8:23 pm #

    “So if your child is kidnapped by someone who IS a family member, you lose the tax credit?”

    LOL, that’s what I was thinking. Can you depreciate a child?

  19. Techi April 14, 2010 at 9:08 pm #

    The reason a person cannot declare the child when it was kidnapped by a family member is to prevent people from gaming the system. Ordinarily, to declare the child a dependent requires that the child have some sort of relationship to the person claiming the dependent, either a blood, adoption, or some other legal relationship. Hence, if the child is abducted by a family member, the abductor could legally claim the child as a dependent and thus the rule prevents both abductor and victim family from claiming the child as a dependent. On the other hand, if the abductor is not a family member (thus having no legal relationship), then legally, the abductor is not entitled to declare the child a dependent (now whether or not he does declare the child as a dependent is a different matter).

    The rule also stipulates that the child must have been in the taxpayer’s care for more than half the year. So if the child is abducted one day before reaching half the year, the taxpayer is out of luck. I personally find that particular reasoning to be a bit specious since if you have a child on Dec. 31st, you still get to declare the child as a dependent for the entire previous calendar year. One would think that the IRS could at least be a little sympathetic to the plight of the victim’s family. But as has been pointed out by others, there are some really bizarre rulings within the IRS Code that defy common sense. Again as has been pointed out already, most of these rare situation rulings were not thought up at the time of the tax codification, but are in response to specific inquiries made to to the IRS based on an actual event that had no accompanying IRS decision.

  20. Uly April 14, 2010 at 9:55 pm #

    Thank you, pentamom.

  21. Brian April 14, 2010 at 10:58 pm #

    This might explain why tax code is 78,000 pages long.

  22. Lucy April 15, 2010 at 12:12 am #

    @pentamom: Prob is it is neither a rule, nor is it clear. The actual wording is “you may be able to …”. Again, “you may be able to… “. What that means is you still need a lawyer and a tax accountant to figure out your specific case, and then defend your specific case if/when the government decides they interpret your case differently.

    You’re correct that is what government is, but you are wrong that that is neither good nor bad. It is bad.

  23. Ali April 15, 2010 at 12:30 am #

    Hmmm, I never knew the tax code was such an interesting read. I shoulda stayed awake in Accounting 101/102.

  24. Robin April 15, 2010 at 2:02 am #

    Peter and Sean – Maybe the family kidnapper gets the deduction since they have the kid?

  25. HankTheCowdog April 15, 2010 at 2:18 am #

    I sent the original comment to Lenore. There I was, flipping through the 1040A instructions online, and “Kidnapped Child” in bold print just kinda *leapt* out at me.

    Thanks for the link to the original case!

  26. Lisa April 15, 2010 at 2:45 am #

    Techi writes: “If the child is abducted by a family member, the abductor could legally claim the child as a dependent and thus the rule prevents both abductor and victim family from claiming the child as a dependent.”

    Even if the abductor is a blood relative, how could they legally claim the abductee as a dependent for a tax credit?

    If abducting the child is illegal, seems like getting a tax credit for doing so should be illegal too.

  27. pentamom April 15, 2010 at 2:55 am #

    The abductor could attempt to portray the child as someone he has legal custody of. He’d lose, but not before the courts had hashed everything out, and the actual parents might have been through an audit or worse. (This is why it isn’t foolish that such codes are included — it protects the parents. The many abuses and depredations of the IRS is a whole different subject.) What this rule does is make it clear (under the circumstances otherwise pertaining to what makes a child a dependent, which is why there is a “may” in the instructions, not because it’s “”not a rule,” or “unclear”) that if a police report has been filed, the parents get the presumption on this point, and don’t have to prove it by other means.

  28. pentamom April 15, 2010 at 2:59 am #

    OTOH, if the abductor IS a blood relative, the possibility exists that he/she HAD legal custody, or at least some visitation rights or some entitlement to have control of the child. (My in-laws are raising his great-grandkids. They’re almost grown up now, but if their mother had taken them without permission at any time, that would have been “abduction.” But it would have been a matter for the courts.) Therefore, the presumption is not as automatic.

  29. bmj2k April 15, 2010 at 5:10 am #

    “Wow! With so many rules that cover so many situations, the IRS must be a model of good government!”

    “Nope. They’re a model of what government is. That could be good or bad. But the best government has to have rules to cover every situation, or there’s too much danger of arbitrary unfairness in applying vaguer rules. The thing is, having all those rules doesn’t MAKE it good government. They can still BE arbitrary, it’s just that without clear rules, they can’t be anything else”

    Oh, my mistake. I thought the IRS was an example of a wasteful and bloated bureaucracy that unfairly targets segments of the population and wastes public money. I see now that you are right- it IS a model of the government. Thanks for not understanding sarcasm.

  30. Arthur'sDad April 15, 2010 at 5:17 am #

    ” But the best government has to have rules to cover every situation”

    I am afraid that, historically, the societies in which the populace had the most freedom and the least strife were those in which the governments had the fewest laws and least amount of intervention. More laws, bigger government, lead to less freedom and more vague generalizations, not less. When a society moves away from common sense and moves toward comprehensive “cover every situation laws,” then you empower the government to have more control over your day to day life, not less. The IRS, to use the example, is poised to hire about 16,000 more agents. Clearly, there is far better use for the public’s money, or should we say, your money and mine, than to bloat an already bloated bureau with more government. The bigger the government, the more laws, the less personal choice you have, though you may labor under the illusion of it.

  31. Sandra B. (Australia) April 15, 2010 at 6:49 am #

    Watson battered by 50-knot winds

    You might like to put in a link to my earlier posts about Jessika Watson.

  32. Sandra B. (Australia) April 15, 2010 at 6:51 am #

    p>S. I love this bit, “The wind has eased to 25 knots and the Sunshine Coast teenager says she will replace the sail and will provide a more detailed update on her blog once the weather settles.”
    This girl is amazing and so are her parents!

  33. Bob Davis April 15, 2010 at 9:35 am #

    There’s a story about Dr. Albert Einstein when he was in residence at Princeton Univ. A friend saw him hurrying across the campus and chatted with him for a bit. He found that the Professor was en route to his tax accountant, and commented, “You’re one of the greatest mathematicians in history, and you need help figuring your taxes?” And Dr. Einstein replied, “My friend, taxes are not in the world of mathematics. They are in the realm of philosophers.”

  34. Uly April 15, 2010 at 11:29 am #

    Arthur, I’m sure you didn’t come just to propagandize, that you can back up your faith with some form of evidence, right?

  35. Nicole April 15, 2010 at 1:15 pm #

    I’d be pissed if my child was kidnapped via a relative abduction and I didn’t qualify for the tax credit. I am sure, if my child was kidnapped, no matter by who I would be spending as much time and money as possible in trying to locate and retrieve my child. The fact that the IRS would not provide a child credit to help in my search, but would provide one for the rare stranger abduction, would make me want to throw things.

  36. pentamom April 15, 2010 at 9:44 pm #

    Arthur — there is a difference between accurately spelling out the terms of a law so that it is mutually understood by both the government, and those affected by it, and having lots of laws to control lots of different things. What I said had nothing to do with the idea that it’s good for the government to intervene in a lot of different areas or to a very great degree.

    You understood that distinction, and just forgot, right?

  37. pentamom April 15, 2010 at 11:29 pm #

    Nicole — it doesn’t say that the child isn’t eligible if there is an abduction by a family member. It’s strictly addressing the other case, where the abductor isn’t a family member. I don’t know what it says about the case of a family member, but that’s legalese — you can’t assume anything from what isn’t said. I suspect the rule for if it’s a family member says you have to take into account what court orders might be present and so forth — so it’s more complicated. But you can’t assume from what it does say that a child abducted by a family member ISN’T an eligible child.

  38. jim April 16, 2010 at 4:24 am #

    Actually, my little sister was kidnapped around 1968 by space aliens, but they brought her back after they implanted the microchip in her head. I don’t think our folks got a tax credit for it, though.

  39. Sierra April 16, 2010 at 12:24 pm #

    This is pretty crazy. OTOH, given how complex the tax codes are, it’s hardly surprising.

  40. pentamom April 17, 2010 at 6:41 am #

    jim, that’s obviously because the child tax credit wasn’t enacted until this century.


  41. Walt April 17, 2010 at 9:47 am #

    Just to insist on accuracy, the IRS does not make the tax law, it just implements it. All those ridiculous special cases written into the law were inserted by the elected Congress, not bureaucrats.

  42. zed purlins November 24, 2011 at 6:46 pm #

    hi to u all , can i tell a joke — The most effective way to remember your wifes birthday is ——— to forget it once !!!, i guess its true haha , regards little jeff