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I've always understood it the way sak9645 explains it. Break it into a two-step process and it becomes a bit easier to explain.
Step one: Pretend you haven't adopted a child, and do your taxes, all the way to making a check out to the IRS (from yourself, if you owe them) or to yourself (from the IRS, if they owe you). Use monopoly money as an exercise if you have to--a pile for the money you earned that you have posession of after doing your taxes and juggling any amounts that have to change hands, and a pile for the money you earned that the IRS has posession of after you've done your taxes and juggled any amounts that have to change hands.
Now, how much money that you earned throughout the year does the IRS still have? Write that total down.
Step two: Suddenly remember that you adopted this past year. If the IRS doesn't have any of your money anymore (because you didn't owe any or because you already got it all back), then you won't get any more. If the IRS still has some of your money, you get a maximum of $10,000 of that money back.
Hope that helps!
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