He will have to pay back any benefits he got relating to the false dependents plus penalties plus interests. If he got EIC, he will most likely be banned from getting EIC in the future for up to 10 years.What happens when you get caught claiming false dependents on taxes. Cousin just got 2 letters from irs?
If a taxpayer claims dependents he is not qualified to take, he must pay back any tax benefits he received, plus interest and penalties.
Depending on the circumstances, the IRS may impose additional penalties and ban the taxpayer from claiming the Earned Income Credit for up to ten years even if the taxpayer later legitimately qualifies for the credit.
Your cousin should take care of this within the time frame of the letters or face additional payments. He can set up a repayment schedule as described in the letters.What happens when you get caught claiming false dependents on taxes. Cousin just got 2 letters from irs?
You have to pay back what you got from claiming them, plus penalties and interest. If you got EIC because of this, you are banned from the EIC program for a period of 2-10 years depending on circumstances.
Prosecution is possible, but jail is unlikely.
If your cousin got letters from the IRS about the false dependents, sounds like your cousin is busted.
most likely if the irs caught you, you will get audited. you have to either make an appointment or send in your tax return along with your expenses, proof of dependents, etc.
any difference they find will adjust your tax return and must be paid. it can get costly.
Must pay tax due with interest and penalty. Also must return EIC with interest and penalty.
Read http://taxipay.blogspot.com/2008/04/list鈥?/a>
You have to pay back the money plus interest and penalties
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