Waldlaw Blog

Saturday, June 25, 2011

Adoption Tax Credit Audits

This is a head's up to all of you out there who have claimed an adoption tax credit in recent years and have now received an audit form from the IRS.  It appears that the IRS is doing across-the-board audits of many, if not all, adoption tax credit claims.  These are not personalized audits -- they are a form audit, being sent out to many, many people claiming the credit.  My understanding is that they are part of a process whereby the IRS is reviewing the scope and functionality of the adoption tax credit itself -- they are not, in fact, aimed at individual tax-payers.

This is not to say that you should not take these audits seriously.  Frankly, I recommend taking anything the IRS does seriously!  But you should not take them personally.  If you received one of these audits, you are not being targeted any more than anyone else who claimed the credit in recent years.

And for folks PLANNING on claiming the credit, this is yet another reminder that it is important to keep good records.  Put all receipts, cancelled checks, invoices, etc in a folder clearly marked "adoption expenses," and then try to remember where you put that folder.  Even though you are adjusting to being a parent, and may not know where your socks are.  ;)  This will make it much less stressful if/when it is your turn to answer to an audit like the one now underway.

Just thought folks would want to know....