Divorce Guidance and Resources for Tax Professionals
CPAs need to be familiar with Rule 1.110 in the AICPA Code of Professional Conduct and Circular 230 which has rules that govern conflicts of interest. As a best practice, a CPA should have his or her firm establish a policy in which partners and staff are made aware of potential conflicts of interest, such as issues associated with divorcing clients.
This page provides guidance, practice aids, tools, and educational resources to help you serve your clients that go through a divorce. Resources include valuable articles regarding a CPA conflict of interest, guidance on innocent spouse relief, templates to communicate with your client and/or his or her attorney regarding a divorce, practitioner checklists, and more.
- Assignment of Estimated Tax Payments in a Divorce: Discusses the often overlooked allocation of estimated tax payments for the year of the divorce, The Tax Adviser, Oct. 2015
- Advising Clients in Later-Life Divorce: Discusses the array of issues that must be addressed in a later-life divorce, such as the maze of options for dividing retirement accounts, The Tax Adviser, Sept. 2015
- Practical Approaches to Common Conflicts of Interest: Highlights some common conflicts of interest encountered by CPA tax practitioners and offers some practical means of properly addressing the consequential ethical issues. The Tax Adviser, May 2014
- Innocent Spouse Defense Against Assessments on a Joint Return: Discusses how married taxpayers filing a joint return have joint and several liability for the tax, and the IRS will look to both taxpayers for payment. However, at times relief may be available. The Tax Adviser, July 2013
- Tax Considerations When Dividing Property in Divorce: Discusses various tax considerations during a divorce as well as potential opportunities for CPAs. Journal of Accountancy, April 2013
- Keeping Alimony from Being Reclassified as Nondeductible Payments: Discusses the tax implications of alimony or spousal support, with a focus on the specific criteria that payments must meet to qualify as alimony. The Tax Adviser, Nov. 2011
- Tax Lien Attached to Property Transferred in Divorce: Discusses how the IRS Office of Chief Counsel advised a member of the National Taxpayer Advocate Office that a tax lien attaches to property that a husband transferred to his wife in a divorce settlement. The Tax Adviser, Sept. 2010
- CPA Conflicts of Interest: Discusses how to avoid conflicts of interest and highlights that CPAs are required to aggressively identify potential conflicts and take appropriate remedial action. The Tax Adviser, Sept. 2010
Tools, Templates, and Other Resources
- Attorney Marketing Letter for Clients Going through a Divorce: Template letter to highlight your skills and promote your services to local attorney(s). Working collaboratively with an attorney is often the best way to serve clients going through a divorce.
- Quick Reference Guide to Divorce-Related Tax Matters: Document that contains a detailed chart that summarizes many of the tax issues that arise during divorce proceedings and the challenges that may affect family law practitioners. Topics covered in this guide include: filing status, exemptions, mortgage interest, and innocent spouse and separate liability relief. Note: most amounts are shown for the 2014 tax year.
- Surviving Divorce: How to Protect Yourself: Toolkit that addresses the financial aspects of ending a marriage and provides advice that can help protect a client’s financial future.
- Divorce Issues Checklist (Word & PDF): Checklist that should be used as a comprehensive planning tool for a divorce.
- Taxation of Divorce after the American Taxpayer Relief Act: PowerPoint slides handout from a presentation from Steve Siegel. In this presentation, Steve walked members through important tax considerations in a divorce.
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