A multiple assistance agreement is a document signed by two or more taxpayers who provide financial assistance to a single dependent person. This agreement allows several individuals who jointly assist a creditor to take turns asserting that person as dependent on their tax return. Several helps are needed when several children contribute to the assistance of an elderly parent. THE LITC has just solved a case for one of LITC`s youngest clients – a 22-year-old student who has supported three members of his budget over the past year. However, the IRS did not allow these dependency exemptions. The IRS did not believe that our client provided more than half of the assistance to his two nephews. The IRS was led to believe this because the client did not have receipts and paid everything in cash. For this reason, they do not have cheque or credit card statements or essential receipts. At the IRS, it turned out that the main supplier of the household was the client`s father. However, the father did not explicitly support the relatives claimed by our client, which gave our client leeway to maintain his original registration status and claim the three persons as dependent. (1) No one has provided more than half of the individual assistance and, in some cases, a person`s situation may meet all the conditions necessary for a person to be considered dependent, with the exception of that person who provides more than half of the assistance.
For example, a group of siblings could intervene to pay for the cost of helping an aging parent. One of them could take most of the responsibility of „Dad,“ including that he lives in his house, but she cannot claim him as dependent because she cannot bear most of the costs. Form 2120. (2) Any member of the group, who together provided more than half of the individual assistance, would have the right to claim the person as a dependent person, but not to have contributed to half of that assistance. 4. Any income that a person receives but does not spend on his or her own support will not be counted as part of his or her own income used for support, in the need for assistance from a qualified parent. For example, if a person had an income of $2,700 but spent only $2,400 on their own support (for example. B accommodation, meals, clothes) and let`s say you spent more than $2,400 to help him, you provided more than half of your support.
(i) a statement identifying each of the other persons who contributed more than 10% of the individual assistance and who would have been entitled to call the person as a dependent, but who would have been allowed not to provide more than half of the individual assistance; And to resolve these tax controversies, the IRS lawyer proposed a simple solution. The father could waive his right to call on our client`s relatives, thus paving the way for our client to solicit his loved ones via Form 2120, Multiple Support Agreement. This form is quite important at a time when no one offers more than half of a person`s help. As the name suggests, multiple support means that two or more people who could claim the person as a dependent, with the exception of the assistance test, together provide more than half of a dependent`s assistance. The LITC was able to receive an affidavit from the client`s father, renouncing his right to solicit relatives, and our client was able to affix the completed form that designated his right to access relatives. In this case, the multiple support agreement allowed our client to solicit dependent people. A qualified parent is a person who meets the IRS requirements to be your dependent parent for tax purposes.