There are a lot of reasons to have kids: free labor, picking up chicks, and, of course, the tax deduction. That last one was popular in my home when I was growing up — my father was a Certified Public Accountant and we kids all knew the tax advantage of children. Sadly, as one single mom found out, you don’t necessarily get that tax deduction just for having kids. As far as the IRS is concerned, she doesn’t have any kids because she’s too poor to support them.
Working at Supercuts for $10 per hour, Rachel Porcaro wasn’t getting rich. She was doing her best to provide for her two sons, though, and thought she was making it work — until the IRS came calling. She was called in for an audit and asked the IRS agent “Why me, when I don’t own a home, a business, a car?” The answer? According to IRS data, a family of three needs at least $36,000 per year to make it in Seattle but Porcara made less than $20,000 a year.
Ten thousand dollars in accountant’s fees later and Porcaro is done with the audit, but in the eyes of the IRS, her kids don’t exist. She can’t claim them as deductions and neither can her parents, with whom she was living and who the IRS also audited. Now, I understand that fraud occurs at all levels of income and that it is discriminatory to only go after the wealthy, but there has to be some reason applied as well. If there are real, physical kids, then somebody needs to get the tax deduction. Who better than the mother who already cares for them?