What To Do If the IRS Challenges Your Dependency - Claiming Dependents in Mexico

By Alex Oware on 06/24/2015 10:00 PM

Question: IRS is rejecting parent’s exemptions on my 2014 return. My parents lives in Mexico and I transfer money to them through Western Union anywhere from $200 to $2000 at a time. However, I don’t have any of the Western Union slips for proof.  My parents are very poor and have NO income.  How do I substantiate this claim to IRS?

Answer: Well, it could be true that you provided over half the support; however you have no way to prove it. Unfortunately, pinky swearing doesn't work with most IRS auditors. The relief is that you can show that you provided the support in some other way, how the money was sent via Western Union, for example.

 

If you paid Western Union by debit /credit card –you could get the amount and transcripts from your monthly bank /credit card statements.  You can also send a request to Western Union to provide transcripts. It's interesting how much information Western Union retains.

***Disclaimer: I am a tax accountant and a CPA , but I am not your accountant or advocate (Unless you have signed up to my services). This communication is not intended as tax advice, and no tax accountant -client relationship results**