Temporary Custody of children

If the children were placed in your home as foster children by the state or by a state recognized agency or process, then you can claim them as dependents if they lived in your home more than half the nights of the year.  Because the children are your nephews, you would be allowed to claim them as dependents if they lived more than half the nights of the year in your home even if they were not placed there by the state, because of the close family relationship.

You can’t do anything preemptively to prevent the mother from claiming them as dependents other than to e-file your return as soon as possible. If you can e-file before the mother does, this will block her ability to claim them as dependents on an e-filed return.  However, if the mother e-files before you do, you can still claim the children as dependents by printing your tax return and mailing it in. Likewise, if you file before she does, she can still try to claim the dependents by printing her return and mailing it in.

Whenever the IRS receives a duplicate claim for dependents, they will send letters to both claimants asking for more information. In your case, you would respond to the letter by telling your story, including documents from CPS that the children were placed in your home, and including other documents that 10 to show that the children lived in your home all year. The IRS especially likes documents from outside authorities.  Such as letters from a school district or a doctor that are about the children’s care and schooling that are addressed to you or sent to your home, that show the children were living with you.  Other proof may be acceptable such as photos of family events, appointment calendars, and so on.   If you are concerned about the mother’s potential future actions, you can begin assembling this proof now. However, you won’t submit any proof with your tax return. You will wait and see if the IRS starts an investigation.