Adoption Tax Credit Update

Dawn Davenport


adoption tax credit

The Adoption Tax Credit has hit a few snags along the way. What’s the current status of refunds?

It’s been two months since tax day, so I thought I’d recap the current status of what is happening with the Adoption Tax Credit.  First a quick bit of tax history to get everyone up to speed. Governments have long used tax incentives to encourage “socially-valued” activities (think: education, charitable contributions, etc.), but the vast majority of these incentives are in the form of tax deductions rather than tax credits.  A deduction is quite useful, since it lowers the amount of income you have to pay taxes on, but a deduction doesn’t hold a candle to a tax credit, which is taken directly off of any taxes you owe.  Quite rightly, in my humble opinion, the government has deemed adoption worthy of encouragement in the form of a tax credit.

The Adoption Tax Credit is refundable, which is important.

In past years the federal Adoption Tax Credit was a simple tax credit where adoptive parents could lower the amount of taxes they owed by the amount of the credit.  Although helpful, some families never were able to take full advantage of the credit if the amount of the credit was greater than the amount of taxes they owed, even though they could carry over the credit for five years.  For 2011 and 2012, the Adoption Tax Credit became a refundable tax credit, which is better—much better—since the government will pay the family the credit amount rather than lowering their tax bill for the amount of the credit, regardless of how much they owed in taxes or even whether they owed any taxes.

Was the IRS unprepared by the amount of people who claimed the Adoption Tax Credit?

Needless to say, this credit has been very popular.  So popular, in fact, that the IRS seems to have been overwhelmed with tax returns claiming the credit and by the amount of some of these refunds, especially for families that have adopted a number of children,  and have carry over credit from the past 5 years.  I have not found any written confirmation that the IRS was taken unawares by the amounts of the refunds requested, but I suspect that they were. For those of you who have not filed yet or will be filing for the adoption tax credit on next year’s taxes, check out our Top Ten Tips for Avoiding Delays When Filing for the Adoption Tax Credit.

For the reporting period ending April 31, 2011, IRS has received 72,656. returns claiming over $897 million in adoption tax refundable credits.  The IRS claims that 58% of the returns with a claim for this credit have been sent for review due to having invalid, insufficient, or missing documentation to support the legitimacy of these claims.  From our informal and totally nonscientific survey, I’d say that the percentage of audited returns is far greater.  The Creating a Family adoption tax expert, Nicole Albrecht, told me that “every single adoption credit refund that I’ve seen has been held up at the IRS and audited.” Quite a few people, although not the majority, have said that the documentation requested had already been sent when their returns were first filed.  Another example of the IRS not being prepared for this refundable credit is that their regulations/guidelines on what type of documentation would be required were late and vague.

Why is it taking so long?

Although I’m really sorry for those who are waiting, and I know this won’t be a popular statement, but I understand the IRS’s position. These are huge (OK, not Iraq war huge or nuclear regulatory huge, but not chump change either) amounts of money we’re talking about.  And this money is not just money “lost” through taxes not paid, but money that the government must cut a check for.  And although many of us get a check from the IRS for our tax refund each year, that is money that we overpaid to the IRS through withholdings, so in essence with the typical check from the IRS, they are giving us our own money back.

IRS spokesman Terry Lemons said, “We recognize what an important credit this is for people who are adopting, since the dollar figure on this one compared to other refundable credits is very large, but we have people who are trying to game the system all the time, so we’re kind of stuck in the middle — we know parents are counting on this money, but we’re also trying to make sure each claim truly qualifies.” This is, after all, their job.

I truly hope that the returns start speeding up soon.  For suggestions on what you can do if your return is being audited, read Delays in Receiving the Adoption Tax Credit–What You Can Do.  Most important, we need to gear up to insure that this credit continues in the future. Creating a Family will be keeping our community up to date on legislation to extend the credit, so sign up for our weekly newsletter on the top left of this page.

Image credit:  GenBug

15/06/2011 | by Dawn Davenport | Categories: Adoption, Adoption Blog, Blog | 104 Comments

104 Responses to Adoption Tax Credit Update

  1. Avatar Tim says:

    Dawn, I called my Congressman’s office and talked with the staff person who handles IRS issues. He was very helpful. He has a sister who adopted two sets of siblings. He called the Tax Advocate’s office last Thursday (May 10). I got a call from him today (May 14) informing me that our refund check would be cut/mailed on May 18th. He is going to call the advocate back on Friday to make sure it happened. So, my advice would be for families who have waited an extremely long time to call their Congressman’s office. It seems to get the attention of the movers when the request comes from their office. By the way, checked the IRS website and it confirmed the date.

  2. Avatar jackie says:

    Hi response to #60 Dawn I called 3-26-12 and was able to speak to someone and i was told that they received my refund on 2-22-12 and that it have been assigned to someone but they havent begin to process it yet. i was told by the tax preparer at h&r block that the amended returns from previous years want appear on the web site can u tell me is that true.Do you know what are they checking for that it take them that long to process a return if you send all the required documents?

  3. Avatar jackie says:

    Hi 3-18-12 I adopted in 08 and taxes was prepared at h&r block. mailed on 2-17-12 and i havent heard anything regarding my refund.when i check the wheres my refund it tells me if they have never received it. can someone tell me is it becouse i filed and amended return for my 08 adoption.

    • Avatar Dawn says:

      Jackie, If you see nothing in Where’s My Refund, it may mean that they have not received your return or somehow it didn’t get logged in. Call the IRS office and politely (!) ask them to check to see what’s up with it not appearing on WMR.

  4. Avatar Dawn says:

    have been making inquiries about whether the IRS has been assessing penalties to people who incorrectly filed for the Adoption Tax Credit and were denied. We (Creating a Family) has heard from a few people, but the professionals I’ve contacted have heard of very few. Usually the adoption tax credit claims that are being rejected are because the tax payers made a mistake and were ineligible for the credit and they were not paid the money. In this case, there should be no penalty. If it is considered tax fraud, then you can be charged a penalty. If you have been charged a penalty even after you have explained the mistake, you will likely need to hire a tax attorney to fight it.

  5. Avatar Leyla Perkins says:

    I agree, they need to make sure each claim is valid before sending the money. Hopefully next year, they’ll be more prepared!

  6. Avatar Jen Gee says:

    I filed my taxes in mid-February and still have not received my full refund. I did receive the nonadoption portion. A friend who also filed in mid-February has not received any refund at all. My latest IRS letter states they “should” review my case by July 9. Of course, will they pay me interest on the refund? Nope.

  7. Avatar FAB says:

    I know that many of our friends are still waiting for their return, but I will say that we received ours in a timely manner with no request for more info – so it does happen!! I will add that we filed our taxes on the last possible day so maybe they had worked out the glitches – One more example of how it pays to procrastinate!

  8. Avatar Kristina Grish says:

    do you know if these people are just being audited on their adoption claims, or on their entire return b/c of the adoption claims?

  9. Avatar eric says:

    Thanks for the site! My wife and I adopted two special needs children in 2009 but recently amended our taxes and applied for the adoption tax credit. We submitted all the paperwork as of November 16, 2012. There has been no response yet from the IRS stating the status of our refund.

  10. Avatar Brian says:

    FInally got notice on 6/18, that my taxes will be deposited into my account on 6/20.

  11. Avatar Brian says:

    I am unfortunately still waiting on my taxes to be returned. They keep telling me its in review, and they probably won’t get to even review it until August. Called for a advocate, and gave them hours to call me between, due to work. They called after the hours on last thursday, and said they wouldn’t be in the office until monday. It is now Tuesday, and I have called multiple times, and still haven’t heard back. Guess I just get to wait.

  12. Avatar Zach says:

    Today I received the adoption credit portion of my refund. I hope everyone else gets their return soon!

  13. Avatar Zach says:

    Today I received a partial refund with no explanation.

  14. Avatar crystie says:

    I cked wmr and it says I should receive my refund before the 17th but I still havent gotten anything. Im waiting on a letter or partial refund and have no clue where I am in the process. How long did it take everyone to get their letters? I filed and had my return accepted in Feb. I attached all the documentation and havent gotten any info yet.

  15. Avatar dawn says:

    We submitted our return 1/30/12. Have had to fax duplicate forms that were mailed already. I was told today that our refund was approved but is pending. The IRS said it will be another 6-8 weeks. Same situation as Zach. They held entire reund, not just the adoption credit part. Everytime I call I get a different answer. Very frustrating.

  16. Avatar George says:

    Dont forget to look into your state return for the credit as well. Some states will allow some portion to be carried over to your state return. May not generate a refund put possibly a credit to carry over.

  17. Avatar Marilyn says:

    We mailed our taxes 2/7/12, to Fresno. They received them 2/21/12. We went through the changes to the WMR site and eventually, mid March or so, it said we were under review. We didn’t wait for the letter and called right away. The IRS agent gave us a fax number. We faxed the info to
    them and it took 5 days for them to
    receive it. I called once a week since and have been told that it’s waiting for review. I was finally given a number to the examiners: 866-897-0177. What I understand, is the review takes 30-45 days. Once your file hits the examiners desk, it’s completed that day. Currently, they examiners are on mid-Feb. So, here’s the scoop in a nutshell, you mail your return with all the requested info attached. They look at it and send it off to another part of the country. Ours is in Kansas City. However, they can’t forward the adoption paperwork, so they request “more info” from you. You fax the stuff again and then you get in line, depending on how fast you faxed it and the date of your original receipt of return. Go figure.

  18. Avatar Melonie says:

    I filed my tax and sent it off early Feb. I just spoken with an examiner and she said they haven’t touched my paperwork and could take 6-8 more weeks if not longer. Bummer!!!

  19. Avatar crystie says:

    I got my letter last night. They are holding my entire refund as well. The letter says its in review and I should hear something within 45 days. Hope it all goes well.

  20. Avatar Shanna says:

    Good luck!! We sent ours in back in February and each time we find out that they need duplicate paperwork plus more. We called a tax advocate and hopefully she can get it fixed. At this point they want something signed from the judge stating they are special needs children. I sent them the subsidy agreement plus the adoption paperwork notarized by the judge.. Still nothing. They could send me what we are due back from our taxes alone but they won’t. This part of the process is horrible. We adopted 3 beautiful children and accepted them into our family. But the IRS wants to make this extremely hard for us all. Why does this have to be so complicated??? I would suggest getting a tax advocate because you can not do this on your own. We thought we sent in the documents they requested last week. But guess what they need something else this week. Why didn’t the letter state they needed it in the first place. But after 80 pages faxed in the last two weeks I hope they have everything they need. The only thing left to give is my first born and my DNA..

  21. Avatar Siobhan says:

    Hi ~ We just got our partial refund today minus the adoption credit. This all just sounds like a game to me. We sent all of the required paperwork and can’t understand what else they would need. We even sent in the ATIN number we received for our daughter. Very frustrating is putting it mildly!!!

  22. Avatar George says:

    Mailed the first return on February 2nd. We finaly recieved our full refund last week. After two letters, many phone calls requesting the same information and a tax advocate. We also recieved the NC State portion. My advice is to call and request a tax advocate for your return. We also recieved a letter saying that we recieved the return as filed but it could still be examined again.

    Good luck to all

  23. Avatar andrea says:

    We filed our taxes the 2nd week in Feb. and have had nothing but problems. We sent in all the adoption paperwork with our returns but received “the letter that our taxes were on hold” March 24th (post dated for April 2nd, not sure why) then another one requesting the adoption paperwork on April 9th. I faxed over all the paperwork 2 times and mailed in a copy. I spoke with an examiner today and he stated that they had received the documentation but that it would take another 6 to 8 weeks for them to review it……This is crazy all of the paperwork was sent in with my original returns. I’m so frustrated by this process and it seems there is nothing you can do. I requested an advocate last week but haven”t heard back from them yet…..

    • Avatar Dawn says:

      Andrea, resend the paperwork you sent in before. You might want to check first to make sure you sent in exactly what they are looking for. Check out those requirements and all our suggestions for how to avoid delays at Top Ten Tips for Avoiding Delays When Filing for the Adoption Tax Credit

  24. Avatar sherry says:

    Thanks I got thru !

  25. Avatar Zach says:

    Sherry –
    On my letter of review it states if I have any questions call 1-866-897-0177 8am-8pm Monday-Friday.

  26. Avatar Chuck says:

    We filed the end of February, sent the return to Kansas City as Turbo Tax directed. on April 30, we got CP05 notices indicating we’re in review. So far, the non-adoption refund (consistent with prior years) hasn’t arrived. And obviously the adoption part hasn’t, either. We pushed like crazy to get the domestic adoption finalized by the end of ’11, get the new birth certificate, and SSN so we could file. Now two months after sending in all our stuff, we’re put in the penalty loop… A bit frustrating. The part about the documentation getting separated from the return before it goes to the reviewer is particularly vexing. And a huge waste of time, money, and resources. An asinine process! Why not just include wit the 8839 instructions to provide TWO copies of the required docs – one to stay behind, the other to go to the reviewers and avoid sending notices, return mail, etc.? Two set of docs are annoying, but the additional re-sending of provided docs is more so. I completely understand the IRS wanting to ferret out cheats and properly vet the adoptions.

    • Avatar Dawn says:

      Chuck, I have thought exactly the same thing. The IRS is using such a convoluted approach, and it would be so easy to simplify. Last year, I said we should all cut them some slack since it was their first year trying to figure out the details of the refundable credit. I thought surely they would have learned a few things and improve the system this year. As with you, I understand their need to audit carefully any refundable credit, but the whole “send in duplicate documents” sometimes more than once seems incredibly inefficient.

  27. Avatar crystie says:

    I checked WMR today and for the first time since getting my letter the status has updated. Before the letter there was a date to recieve my refund but then I got the letter and it changed to being processed. Now it says I should get a direct deposit on the 17th of this month. Ive got my fingers crossed that something will be deposited….

  28. Avatar sherry says:

    I calld the toll free # & it states that they can’t give me no info on My taxes that were did on 2-10-12 . What number do i call to talk to someone on the phone.

  29. Avatar sherry says:


  30. Avatar George says:

    Contacted the IRS for a tax advocate assistance. They have sent a second letter requesting all adoption exspenses. Cancelled checks and so on. Any one claiming this credit knows that with a special needs child that you can claim the full credit reguardless of wheather or not there were any exspenses. How come the IRS is asking for someting that is not required. I believe I am correct in what I am saying. I have nothing to send in but the original documents I sent and they are all that was required by the IRS in the first place. What a waste of time and money by our goverment.

  31. Avatar George says:

    Racheal, more than likely your letter is only going to say they are reviewing it and will contact you if they need more information. Sounds like you will get the standard letter that just about everyone I know claming this credit this year and last recieved. Sorry and good luck

  32. Avatar sherry says:

    what number do i call to check on My amended taxes that was sent 2-10-12 ?

  33. Avatar racheal says:

    We filed Feb 14th. It said we would receive ours by March 10th. Now it says we will not recieve ours, that they are sending a letter with more information. We gave them everything they needed, all papers from the state, an original adoption decree from court, etc. And they still won’t send it to us? I am waiting on the letter to say what they have to say!!!

  34. Avatar sherry says:

    I did My taxes on Feb 10 and I have not received any notice of My amended taxes yet. How long does it take for a response?

  35. Avatar Zach says:

    I just looked again on “Where’s my refund” and now it says “Your tax return has been received. It is now being processed” – unfortunately it does not give me a date.

  36. Avatar Zach says:

    I also proactively sent all of the required documentation. According to “Where’s My Refund” I was supposed to receive my return by the 28th. Although, I knew better than that since I received the review letter a couple of weeks prior to that. I have not received any refund at all. Strange how you sent yours in on 02.06 – I sent mine in on 01.30 and have yet to receive any refund, not even a partial. All I’ve got so far was the review letter and then another letter asking for the documentation (again)… Bummer

  37. Avatar George says:

    Lea, our situation is almost identical we alsosent in our 2011 return with all required paperwork. We sent it on 2.6.12. Five weeks later after checking the “Where’s My Refund” on the IRS website it said to expect my refund on 4.10.12. Rechecked a week later and now it has changed and says that I will be receiving a letter requesting more information. We did recieve our refund MINUS the adoption credit. This tells me that someone recieved the proper paperwork but it is going a different route. I hope it is not 6 months as you posted. We had no idea of the credit when we adopted and could greatly use the help this credit will give us

  38. Avatar George says:

    Recieved my letter from the IRS, after a 9 week wait. Said it was being held for review and I should recieve refund OR a request for other information. Ask for nothing specific. I recieved a partial refund minus the adoption credit. I know i mailed the correct documentation per the IRS website. This is a delay tactic. It would have taken 5 min. to look over the decree and the adoption asistance paperwork. What could they ask for. Do you think they are going to contact the court house. Not likely. Sounds like this is a common practice for the 2011 returns. I am calling to report a hardship to see if I can speed this along.

  39. Avatar Jenn says:

    Brian-I am in the same boat with the exact dates. Only today I received the letter. When I called they explained this whole rediculeus process. I have to wait 5 or so more weeks for a letter to resubmit my documentation (sent previously). They will then WAIT for 8 weeks to look at it. Then they will make a determination. She said to expect my refund in September or October. I hope you hear differently!! I am only hoping to get the refund portion not included in the adoption credit to get through a tough job-less time.

  40. Avatar Brian says:

    I checked the wheres my refund data on the website again, and it states that they require information from me and sent me a letter stating what they need. I just recieved a letter today stating that they don’t need any information, they are just reviewing my tax forms. I guess I’ll be making a phone call and seeing what’s going on.

  41. Avatar JJ says:

    I adopted 2 infants, mailed my return 2/8/2012 with copies of the court orders. Although WMR site says 4/10, I have been informed that I am being audited, I was told, “people lied last year and some tried to file fake court documents and we have to make sure your’s is real.” They won’t release my regular refund until they finish the audit because “if the children aren’t really yours, you will owe taxes after we delete the child tax credit.” I am having to send copies of the court orders again because the audit department doesn’t have all my documents. They said I should receive my refund approximately 8 weeks after they receive my documents. I wish I hadn’t believed the IRS information regarding refund in approximately 3 weeks when required documents are attached as I could have not bothered with the adoption refund and at least received my regular refund. It really doesn’t matter if you attach your court documents, they will only ask for them again.

  42. Avatar Zach says:

    Same situation. We mailed ours out on 01/30. Received a letter informing us we were under review. One day later, I received the letter informing me they needed documentation supporting the credit(which I already sent to begin with) – I called to confirm they received the second set via fax and they confirmed that I now have 90 days additional wait time from the day they received my fax. (March 12th) They have witheld my entire refund, not just the adoption credit. At the earliest I am looking at a May refund…

  43. Avatar Brian says:

    My refund return date has switched to 04/17/2012

  44. Avatar Brian says:

    I filed my taxes on 02/13/2012, and today is the first day anything was listed on the where’s my refund link. It states I will be receiving my refund on 04/10/2012, so hopefully nothing changes.

  45. Avatar Devonne says:

    Hello, I did a amended return for the adoption credit,Dec 2010 but I hav not heard anything,nor have I received any letters from IRS,all they keep telling me is that the IRS has 8 to 12 weeks,would the IRS had contacted me all ready if they’re was a problem?will I receive letters before my refund comes?

  46. Avatar Lynn says:

    Filed on 2/14/2012. Had adoption Credit and was first updated to expect refund by 3/2/2012. Receivevd notice that refund is on hold pending a review and findings will be sent out in 45 days which will be April. Called and was told refund may still be held after the 45 days and that only their findings will be updated or a request for more information. This is the second year of claiming this adoption credit as I did it last year due to carryovers and then finalized another child in 2011 so I know what documentation was needed and I sent everything and then some. All neatly organized as it should be with my SSN on every page. Very possible I wont see my retun until early summer. Different story from different person every time I call for info. Disheartening to say the least.

  47. Avatar Brian says:

    I just had my taxes done today, and I was informed that my adoption tax credit will be getting refunded to me. I had my taxes done by a government office as well.

  48. Avatar veronica minjarez says:

    We adopted this year in 2012 we woould like to know if the tax credit will still be available for us to claim in 2013 our son is considered special needs he is 15 years old our adoption closed in January 31, 2012 or can we claim the tax credit already?????????

  49. Avatar Paul says:

    Dawn,You posted the following on the Adoption Tax Credit. Can you clarify if the credit for 2012 will be refundable or non-refundable? Thanks, Paul

    6/15/2011-States it is refundable for 2012
    For 2011 and 2012, the Adoption Tax Credit became a refundable tax credit, which is better—much better—since the government will pay the family the credit amount rather than lowering their tax bill for the amount of the credit, regardless of how much they owed in taxes or even whether they owed any taxes.

    8/30/2011-States it is NOT refundable for 2012
    This extension does not apply to the changes made by the Patient Protection and Affordable Care Act; therefore, the adoption tax credit for 2012 will revert to the pre-2010 credit amount (adjusted for inflation) and will not be refundable.

  50. Avatar Donna says:

    We are still waiting for our adoption tax credit!! We adopted a special needs child from foster care and have sent the fax (26 pages) twice! Just got another letter today saying that they need another 30 days to review. I have called them and was basically told that I was a pest. I have been to the federal office here in NE and the guy said I only needed a birth certificate. I have sent 2 letters from the HHS that he is indeed a special need adoption. Any ideas?

  51. Avatar Garry says:

    Please clear up a point of confusion. Is the tax credit refundable for children adopted in tax year 2012? Thanks.

    • Avatar Dawn says:

      Garry and Eileen, check out this blog on The Future of the Adoption Tax Credit in 2011, 2012, 2013 & Beyond ), which i think will clear up your confusion.

  52. Avatar Amy says:

    We have been charged a 20% penalty ($1,900) but without any clear reason why. We had a failed adoption in 2008, another failed adoption in 2009 and then a successful adoption in 2009. The kicker is that the IRS keeps sending statements that we haven’t even been reviewed yet………sssooooo confusing, frustrating and no clear path on how to resolve it. We will keep jumping through the hoops—and create an impeccable paper trail.

    • Avatar Dawn says:

      I haven’t heard of many people being charged a penalty for the adoption tax credit part of their return for mistakes. You will eventually find out why you are being charged a penalty. If it is for an innocent mistake, you should consider hiring a tax attorney.

  53. Avatar Eileen says:

    I also saw the tax credit was non refundable for 2012.
    Could someone pelase verify if it’s refundable or non-refundable?????

  54. Avatar Jennifer says:

    Finally received my tax return on August 12 after originally filing in early April.

  55. Avatar Michelle says:

    I thought the adoption tax credit was non refundable for 2012

  56. Avatar Lilly Ferrick says:

    We filed ours right on time, were asked for the documentation AND sent it all in, stacks of receipts. They received it around 5/20 and we are still waiting.

  57. Avatar Sharon says:

    My accountant told us that the audits were being done in a separate division of the IRS and they do not receive all the paperwork submitted with the tax return and that is why people are being asked to resend the documentation even after they have sent it to them with their tax documents. Not sure if that is actually the case but that is what we were told. FYI we just submitted our taxes since we didn’t have our act together by tax day so she has seen this happen before with one of her other families. We are able to wait for our refund so we didn’t bother sending all the documentation with our return. However our adoption was just finalized in 2009 so it won’t be too hard to find it all. I cannot imagine having to go back 4 or 5 years and finding all the documentation again!

    • Avatar Dawn says:

      Sharon, from the research we’ve done, what you heard is correct. The adoption tax credit part of the return is sent to a separate office for audit. In an ideal world the documentation would accompany it, but in practice the documentation often stays with the original return. I’m assuming this is because they don’t separate at that point what part of the documentation is needed for the rest of the return and what part is needed for the adoption tax credit.

  58. Avatar Jennifer says:

    Contacting a taxpayer advocate in your state WILL expedite things. We contacted ours just 2 weeks ago and we will be getting our refund within 3 weeks. We’re SO thankful for our taxpayer advocate. You do need a hardship to qualify though. I don’t know if we are getting any interest or not, just very thankful that we will be getting our credit (hopefully).

  59. Avatar Jennifer says:

    Last night I got my second letter informing me that the review will take ANOTHER 30 days. Sigh.

  60. Avatar Sally says:

    We filed 2nd week of Feb. 2 special needs foster care adoptions one from 2008 and one in 2009. We had carry forwards left. We used “Tax Cut”- but no e-file permitted for those claiming the ATC on th 8839 forms(because they needed the docs mailed in) So hard copies mailed and all docs sent even called IRS personally to VERIFY what docs they require- sent them ALL Including the decrees, birth certificates, proof of special needs, adoption subsidy agreements. We had refund date for 4/12. But early March a partial return into direct deposit(minus ATC amount)- then shortly after, an IRS letter came saying requiring docs to be RESENT within 30 days for “review” Sent them ALL again (right away), faxed- and also sent certified Mail, also then adding letter from County agency stating both adoptions were special needs. End of April came and another set of duplicate letters stating “they recieved our docs on 4/4 and are reviewing, and we would have a response in 45 days”….End May came and another set of letters stating “they are reviewing” and we would have a reply by 6/19. Nothing. This time they didn’t even bother sending a letter on time, so 6/20 I called IRS again (which I have learned is often a waste of time, as well as the “where’s my refund?” site) had to call 2 times since first call they reported their “system down”- and finally was told by another agent our review is still in progress, and another letter will be coming stating we will (again) have a response by AUGUST 19TH!! It appears there is soooo much more to this, especially from what I read from all these adoptive families. Our file went to Austin Texas (locations scatterred all over the US) It is true 2nd set of papers need “resent” because they are not forwarded to the Examiner’s office you get assigned to. Tax advocates are only being assigned if you show a hardship like a foreclosure or shut off for example. we were turned down twice for assistance, then finally today we were able to have one assigned because of some financial issues that arose related to our children and their medical conditions. Even then, I am told having a Tax Advocate WILL NOT EXPIDITE the review process. I think we are over 150 days since filing. This is blatant incompetence to tax payers. These families NEED their refunds, it is tax code being eligible to claim. I believe there is other reasons for the delays not being conveyed by the IRS. I am reading now they are reviewing and scrutinizing excessively, applying large penalties to families and disallowing the returns in some situations. I believe if it continues alot of media attention will ensue- people will want answers how this was allowed to occur. Normal audits should take no longer than 6-8 weeks.

  61. Avatar rmaxwell says:

    We filed ours for our 2010 adoption from China. Filed return and only paperwork listed in feb 2011 and had our return electronically deposition in about 4 weeks. So not everyone is being audited. Just hope folks get the money they deserve and those abusing the credit get washed out so this great resource remains available to adoptive families.

  62. Avatar Krista says:

    We mailed our return in early Feb. and used Turbo Tax (mailed the supporting documentation separately). We had 1 adoption to claim in 2010. We received our refund about a month later.

  63. Avatar michele says:

    I understand what you are saying, although I hope the return is swift for those who are waiting. I am currently in process of adopting a little girl and may or may not travel before years end. What is the sense of how this refund will be implemented in 2012? Will it dissolve, continue or roll over into the “cedit” status???

    • Avatar Dawn says:

      Michele, the truth is that no one knows. We will be gearing up our advocacy work for the adoption tax credit this year, and we’ll keep you informed with what’s happening through our newsletter. You can sign up at the top left of this page.

  64. Avatar Matt says:

    “The IRS claims that 58% of the returns with a claim for this credit have been sent for review due to having invalid, insufficient, or missing documentation to support the legitimacy of these claims.”

    Oh – you mean the information the IRS didn’t ask for on the tax return?

    If they wanted us to send in the information, why didn’t they ask for it in the first place? That’s what’s been bothering me the most through all of this. I know of families who sent documentation with their return even though it wasn’t requested and they were STILL placed under review and they were told to send in the same documentation they’d already sent – so it appears that they weren’t really looking for the documentation to begin with.

    Instead of delay, delay, delay, this could have been made much easier for both sides if they’d merely said “Please send in this information when you file.” But they didn’t. And now it’s a mess for many families.

  65. Avatar tam says:

    we filed mid feb also. so far not a penny. and calling there gets me no more info that the letters they send (ie: its being reviewed) We waited until the FINAL version of the form was out. we used turbo tax. there were other screw ups due to turbo tax too. so we adopted 6 kids in 1 years time(yes really) so we had carryover as well as 4 kids adoption credits refundable. and as yet I know nothing more than its in review and they should be done with it by July 7 but I fully expect at that point they will send another letter saying its delayed again. Its already been 3 months since we filed. we need a bigger house! we need that money!

  66. Avatar Heather Besch says:

    I was told by someone at the IRS they are adding on interest.

  67. Avatar Suzy says:

    I guess we were lucky ones, we never had a question asked and ours was returned in about 3 weeks in 2010. I hope this tax credit continues after 2012, do you know when this needs to be extended by or what the risks are that it won’t be extended?

  68. Jen Gee, actually, I’ve heard from someone that they did pay interest.

  69. Avatar Carrie says:

    We filed our taxes on Feb. 25th and are still waiting for our credit to be reviewed so that we can get our money back. It’s frustrating as we recently accepted a referral for our 2nd child and had to pay all the fees. We should have had our money for the tax credit from #1 already to help with our 2nd adoption but the government is taking their time!!

  70. Kristina: For most people, only the adoption tax credit claim is being reviewed.

  71. We were one of the lucky ones who got our refund quickly and without any request for further documentation. We did use CPA. I don’t know if that made any difference. But I do know I’m putting the money toward a minivan!!!! I sure hope everyone gets the money they are due very soon.

  72. Avatar Bethany says:

    I don’t believe the CPA thing matters because my husband is an enrolled agent who works for a CPA and they filed ours in March (and we sent the requested documentation in April) and we still haven’t gotten a penny. My husband called the IRS today and they said they still don’t have an expected date for ours to even be reviewed.

    I’m hoping they’ll end up owing us enough interest that we get to take a cruise. =oÞ

  73. Avatar Melissa says:


    I work for a fellow adoption agency and one of our clients just received a 20% penalty fine (almost $3000) because their accountant filed the adoption failure in the year that it happened, and not the following year. Any suggestions on what we can do for them? They’ve already had 2 failed adoptions and it feels horrible that they would charge such a large fine for an error that we didn’t even realize had occurred. Thank you for any advice you might be able to offer! I have suggested a tax advocate and we have filed a form for abatement


  74. Avatar mom of 2 adopted says:

    I am so glad I found this blog, and am one of the many waiting for a return. Here is our time line:
    March 3rd – mailed our return w/ all documents.
    April 9th – received letter stating our return was going for review.
    May20th – received review stating that they wanted us to settle for less because they had not received our daughters letter from the state stating she was foster/ special needs.
    May20th – faxed documents again 2nd time received. Also sent document certified mail.
    June 6th – received letter saying we’d hear from them by July 11th.
    July 11th – heard nothing, and received no money, so a call was made to the irs — lady i spoke to stated they still had not received the document ( letter from the state).
    We have faxed and sent this letter certified, at least 4 times. Sent it again today via: fax and certified mail. Lady I spoke to yesterday said my things are in Kansas city, and until they receive my letter from the state, my file will stay open for 90 more days.
    Can someone help PLEASE! I cannot wrap my mind around how they keep losing my documents?! I receive confirmation ( receipt) via mail and fax that they have receive what I sent — what is happening from there?!! I have put on my tax id # and primary social on all documents.
    Its so disappointing that we are having to pay for their obivous negligence . Any suggestions would be greatly appreciated!!!

  75. Avatar Nathan says:

    How about this one… After submitting taxes in mid-Feb along with IR-3 visa, I was flagged for review and eventually they asked for more documentation. (Nowhere in the instructions does it ask for receipts.) I sent all receipts and the IR-3 visa again. A few weeks ago, I was notified they were denying us the tax credit because “the adoption was from a non-Hague country and we did not send an IR-2 visa.” Seriously? I called the IRS and the woman I spoke with agreed that an IR-3 visa is acceptable documentation (very clear in the instructions.) She recommended I resend the IR-3 visa along with a copy of the foreign adoption decree because it will go to a different examiner this time around who might know what he or she is doing. If this doesn’t resolve it I’m going to have to hire a CPA or tax attorney to help. Thanks for the updates on the blog, I didn’t know until tonight that so many people were having problems.

  76. Avatar Pa says:

    Extremely good post, I am checking back again on a regular basis.

  77. Avatar Amy says:

    We filed by mail February 24th using a CPA(overnighted return and all documents)we were carrying forward for 2 special needs adoptions from 2007. We received a letter in early April that they need supporting documents. Sent those documents and received a letter May 9th that there was a computational error on our Form 8839 and they were adding $2040.00 to our return. Yay! Then got a letter a couple weeks later that they were still reviewing all documentation. Didn’t hear anything, so I contacted a tax advocate, then got a letter June 25, 2011 telling us we owed the IRS $5,093.93. Called the IRS found out the tax examiner had disallowed our return because she couldn’t figure out why there was a discrepancy in amounts, so the computer was charging us for understating our tax liability since the credit had been disallowed. IRS agent said it would be removed once all this got straightened out and that this was all so confusing that the tax examiner needed to call me. She said I would receive a call in 3-5 business days and if I didn’t get that call to call back. So, as a precaution, I went back to all the Form 8839 Instructions and credit carry forward worksheets to verify that all numbers had been done correctly. Everything was correct except 2010 and there was a computational error (like the IRS letter said), that should give us another $2040.00. I faxed all of the form’s 8839 and Credit carry forward worksheets to my tax advocate and my tax examiner explaining where the discrepancy in amounts comes from. I never received that phone call from the tax examiner, so I called back on June 27th, again I was told this was too confusing to be handled by mail that I needed to talk to the tax examiner and they would put in an “action notice” for her to call me within 3-5 business days. No call ever received. I called back on July 6th and got the exact same response and the two previous times. Expect a call within 3 -5 business days. Still no call, so I called back this morning and now they say they will have the Manager of the tax examiner call me within 3 – 5 business days. I have tried to get my tax advocate to help, but she acts like she doesn’t have a clue what is going on. I have given her all documentation and tried to explain all of it to her. I’m so frustrated, I have no idea what to do next.

  78. We used a CPA, and filed on the last possible day as well. Our CPA sent us information on what documentation to send along. I couldn’t find our copy of the adoption assistance letter so I got a brand new one direct from DHFS to send in along with a copy of our adoption decree *and* I also sent in a copy of our foster care license which specifically states that we are licensed for the purpose of adopting from the special needs adoption program. I don’t know if sending the foster license did the trick, or if procrastinating did the trick (as someone else said, above), but we got our refund almost exactly three weeks later as well.

  79. Avatar Chez Sanderosa says:

    We mailed in our tax paperwork about a week before it was due, and we received our full refund approximately one month later with no questions asked. We did use a CPA. I wonder if anyone has done a separate survey to see if taxes done by CPAs were processed faster than taxes done by the individual filer?

  80. Avatar Carrie says:

    We are finally getting our refund! They received all supporting docs on 04/06 and our check was mailed on 06/24. We are getting the full amount plus $86 in interest.

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