Notice of adjustment to my 2017 return due to married filing separately/NRA

Hi folks,

Hoping for some collective wisdom on my situation:

I am a US citizen living in the UK on a spousal visa, and am married to a British citizen.  My British husband does not have a US SSN.  I filed my 2017 federal return as married filing separately, and listed my husband as "Firstname Lastname - NRA - No SSN".  I claimed 3 exemptions (one for me, one for my husband, one for our son). 

I received a hefty refund check and am happy about that, though it was about $400 less than I was anticipating.  Today I received a separate letter notifying me of changes made to my 2017 1040.  The letter lists adjustments made by the IRS:

"We didn't allow your spouse's personal exemption because your spouse's
--SSN or ITIN was missing, OR
--Last name doesn't match our records or the records provided by the Social Security Administration"
Each exemption listed on your return must have a valid SSN or ITIN (206D)"

I looked again at the 1040 instructions and for part 3, where you list your filing status, it says "Be sure to enter your spouse's SSN or
ITIN on Form 1040. If your spouse doesn't have and isn't required to have an SSN or ITIN, enter “NRA.”

So I'm confused why the IRS would have adjusted my refund when it seems like listing a spouse as NRA is allowed.  I have the option to call a number or dispute the reversal by mail.  Before I do, I wondered if anyone has an opinion on this.  Did I make a mistake or did the IRS?  I'd also like to understand better so that I don't replicate the same mistake on my 2018 return.

Thanks for your advice!

You claimed an exemption for an individual who does not qualify.  Your husband could of course apply for an ITIN if you think this would benefit you.  Equally you could both make a once in a lifetime election to file jointly.

Thank you. So going forward, I should file as MFS but not claim an exemption for my husband, since he has neither an ITIN or SSN? Is that correct? (Understood that we have the option of applying for an ITIN or making an election to file jointly.)


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