Looks like that family would be exempt from penalties.
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(f) Household income below filing threshold—(1) In general. An individual is an
exempt individual for any taxable year for which the individuals household income is
less than the applicable filing threshold.
(2) Applicable filing threshold—(i) In general. For purposes of this section,
applicable filing threshold means the amount of gross income that would trigger an
individual’s requirement to file a Federal income tax return under section 6012(a)(1).
(ii) Certain dependents. The applicable filing threshold for an individual who is
properly claimed as a dependent by another taxpayer is equal to the other taxpayers
applicable filing threshold.
The mental midgets at the IRS are going to be able to do all of this math?
HA! That is unlikely.