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Advocates: Frequent IRS Audits Put Adopting Families Through The Ringer

Taxpayer Advocate Service: 90% Of Adopting Families Are Subject To Audits

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NEW YORK (CBSNewYork) — It has been a long, but gratifying three years for Mark Krieger and Paul Siebold.

“We’ve always wanted to adopt and build our family. It took us a long time,” Siebold said.

It took three years of paying adoption agencies, making trips to Connecticut to visit the birth mother, and filling out stacks of paperwork for the couple to finally adopt 18-month-old Morgan. Not only is she, Paul and Mark’s pride and joy, she is also a federal tax credit, CBS 2’s Jessica Schneider reported Thursday.

“They offer the credit to make it easier for families to afford what is normally a very, very expensive process,” Krieger explained.

But now Paul, Mark, and hundreds of other couples are waiting again, according to the Independent Taxpayer Advocate Service. The Internal Revenue Service has delayed payouts to 90 percent of families who have applied for it, and has subjected 70 percent of those families to audits, the service claims.

“It seems counter intuitive that they’re going to give you the credit, but then would withhold it and audit you after,” Krieger said.

The IRS defended the delays and told CBS 2 that the large payouts, up to $13,000, mean that there is a high risk of fraud.

Some experts questioned the policy.

“I think it’s indefensible. If they don’t like giving the credit, then don’t give the credit. But let’s not put many good people through the ringer because they want so desperately to adopt children,” tax attorney David Selig said.

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