Monday, April 11, 2011

Problems With Adoption Tax Refunds

Are you experiencing delays with your adoption tax refund? If so, you're not alone -- it is apparently a widespread problem for adoptive families throughout the United States.

The IRS is apparently delaying adoption tax refunds. Even if you filed your taxes exactly as required by the IRS, you may experience a delay of months in getting the adoption tax refund to which you are legally entitled. We have learned that countless adoptive families are experiencing inexplicable and inexcusable delays in processing of adoption refunds. The IRS itself has been vague about the adoption refund delays. The IRS is issuing confusing letters and adoption refund status updates for individual families. We have heard reports that the IRS has even lost paper returns or some of the documentation. The IRS seems to be randomly choosing adoptive families for "review" and demanding different information from different families, creating mass confusion among adoptive families. We are not aware of any public statements being issued by the IRS that would help clarify this adoption refund nightmare.

Here's how the situation appears to be unfolding for many adoptive families:

* You file your taxes as required by the IRS.

* You might get a portion of your non-adoption related refund. Or you might not.

* You might notice, using the IRS status of refund tool online, that your return has been received and given an estimated date for processing of your refund. Or you might not.

* You might be notified by letter from the IRS, many weeks after filing, that your tax return has been chosen "for review." Or you might not.

* The letter may tell you that no additional information is required and that it might take 45 days to review your adoption return. Meanwhile, you are left wondering what's happening.

* You then might receive more letters from the IRS, this time demanding detailed adoption expenses and "written explanations" of each adoption expense. This letter gives you 30 days to comply but does not tell you how long it will take the IRS to review your documentation. If the IRS finds your documentation acceptable, you may get your adoption refund; if not, your adoption refund may be refused.

Again, if this is your situation with your adoption refund, you're not alone. But if you have a legal adoption and the refund to which you are entitled has been inexplicably delayed, consider contacting your local media or your local government representatives for help. Again, the IRS doesn't appear to have issued any sort of public statement addressing this widespread problem, and adoptive families are left confused and uncertain how to proceed.

Some resources for additional information:

Dave Thomas Foundation for Adoption

North American Council on Adoptable Children

Adoptive family forums

Please share your stories here and link to your own adoption blogs so that more adoptive families become aware of what's happening -- and so they know that they're not alone.


Rebekah Dowd said...

We are one of three families in our circle that did foreign adoptions last fall. One family received a quick adoption refund this spring. Two families are waiting and have been told to send more documentation. This is frustrating !

artsfish said...

We are expecting a refund for two adoptions from China. We didn't file until 4/11, so we haven't had a chance to find if there is a delay.

We sent in the Chinese adoption decrees and their citizenship certificates as an extra because the adoption decree seemed not enough, even though that was all the IRS seemed to be asking for.

Has anyone reading this filing with Chinese adoptions had delay problems, and is so I would be curious to know what they were.

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