Choosing what documents to require during a dependent audit is an important step in an effective audit process. Many organizations only require a marriage certificate in order to prove this relationship. While this is certainly acceptable, it is important for employers to understand how this decision will impact the audit.
A marriage certificate only proves that a couple was legally married on the day that the certificate was issued. However, additional documentation might be necessary to ensure that the couple is still married. In addition to the marriage certificate, we recommend asking for one form of current documentation that establishes financial interdependence. This could be a 1040 Tax Form(with the financial information redacted), a joint bank account statement, a lease, or a mortgage account statement. Whichever document is chosen, it should be current with both names and a common address listed. If only the marriage certificate is required, then an employer will have less of a chance of identifying individuals who are no longer married. Common law marriage is another situation which won’t be reflected by requiring only a marriage certificate.
Another option many employers consider is to only require a 1040. But, they may not get an accurate picture of the legal state of the union if they rely solely on this document. As the IRS knows, many individuals don’t always file their income tax returns within limits of the law. Many married couples will both file Head of Household, each claiming a child as a dependent. This means they will pay less tax, but this savings puts them at risk if they are audited by the IRS. Situations like this will make it difficult to determine if the couple is actually married from the sole use of a 1040.
The decision about which documents to require is ultimately up to the employer, but understanding the ramifications to those decisions is important.
