Just wondering has anyone actually called the IRS directly about this? When my brother got divorced, he contacted the IRS and requested what's called "innocent spouse relief" which can separate the tax liability in certain situations.

One thing that hasn't been mentioned yet is that you can actually request an IRS Form 8857 (Request for Innocent Spouse Relief) even during divorce proceedings if you believe your spouse's actions or errors caused the majority of the tax liability. Since your ex was working two jobs without proper withholding coordination, this could potentially qualify as "erroneous items" that you weren't aware would cause such a large tax bill. The IRS will review whether it would be unfair to hold you liable for tax resulting from your spouse's income reporting or withholding decisions. Even if innocent spouse relief doesn't fully apply, the analysis the IRS does for Form 8857 can provide documentation showing which spouse's income and withholding decisions contributed most to the joint liability. This official IRS determination could be very valuable in your divorce settlement negotiations, as it's an objective third-party assessment rather than just dueling calculations from attorneys. Worth discussing with a tax attorney who specializes in innocent spouse cases - many offer free consultations for divorce situations.

Great question! As someone who's been through this exact confusion, here's what I've learned about per diem for sole proprietors: Your accountant is right - you can use GSA per diem rates for meals and incidentals (M&I) but you'll still need actual receipts for lodging. The GSA website has a per diem lookup tool where you can enter your destination cities and get the exact daily rates. A few key things to remember: - First and last days of travel are prorated at 75% of the full daily rate - You'll only be able to deduct 50% of the meal portion when filing taxes (though the calculation is done after applying per diem) - Keep a simple travel log with business purpose, dates, locations, and who you met with - this is required even when using per diem For your upcoming Atlanta/Denver trip, definitely look up the county-specific rates since metro areas can have different rates by county. The per diem method will save you from keeping track of every meal receipt, but you'll still need documentation showing the business nature of your travel. One last tip: if you do any entertaining of clients during these trips, those meals have different rules and you'll want to track those separately with actual receipts.

One thing I'd add from my experience as a sole proprietor who travels frequently - make sure you understand the difference between "high-cost" and "standard" locations when looking up GSA rates. Cities like Denver and Atlanta might have higher per diem rates than you expect, especially during peak seasons or special events. Also, I learned this the hard way: if you're combining business and personal travel (like extending a business trip for a weekend vacation), you need to be really careful about which days you can claim per diem for. You can only use per diem rates for the days that are primarily business-related. For tracking, I use a simple note-taking app on my phone where I log each day's business activities immediately. Takes 30 seconds but creates a solid paper trail. Then I just export it to a spreadsheet at tax time. Way easier than trying to reconstruct everything months later! One last tip - if you're staying at extended stay hotels or places with kitchenettes, you might want to consider tracking actual meal expenses instead of using per diem, especially if you're cooking some of your own meals. Sometimes the actual expense method works out better financially in those situations.

This is such a common frustration! I went through the exact same thing when my parents paid my law school tuition after I got married. The rules definitely seem backwards - the people who are generous enough to pay get no tax benefit. One thing that helped me understand it better is that the IRS views education credits as a benefit for supporting a dependent's education. Once you're married filing jointly, you're no longer anyone's dependent, so the credit "follows" you as the student. The silver lining is that you and your spouse can likely claim either the American Opportunity Credit (if you're in your first four years of higher education) or the Lifetime Learning Credit (for graduate school). With $12,450 in qualified expenses, you could potentially get up to $2,500 back depending on your income level. I'd definitely recommend the approach that Harmony suggested - calculate what credit you receive and consider sharing that benefit with your in-laws as a way to acknowledge their generosity. It's not a perfect solution, but it helps make the situation feel more fair for everyone involved.

I just wanted to chime in as someone who works in tax preparation during filing season. This situation comes up constantly, and I always tell clients that while the rules might seem unfair, there's actually good reasoning behind them. The education credits are designed to benefit the taxpaying unit that's supporting the student's education expenses. Once you're married filing jointly, you and your spouse are considered one taxpaying unit, and you're no longer a dependent of your parents/in-laws for tax purposes. The key thing to remember is that your in-laws' payment is treated as a gift to you, and then you're considered to have paid the qualified expenses yourself. This means you can absolutely claim the credit without any issues - the IRS doesn't care about the source of the funds, just that you had qualified expenses and aren't claimed as a dependent. For graduate school expenses like yours, you'll want to look into the Lifetime Learning Credit since you're past the undergraduate level. With $12,450 in qualified expenses, you could get up to $2,000 back (20% of the first $10,000). Definitely consider sharing this benefit with your generous in-laws! One tip: make sure to keep documentation of their payment to the school, just in case. While not required for claiming the credit, it's good practice for your records.

I've been dealing with IRS notices for years through my work, and I wanted to add a few practical tips that might save you some headaches: When you send your certified mail response, also send a regular copy via standard mail as backup. Sometimes certified mail gets delayed or lost in processing, and having that backup ensures they receive your response. It's a small cost for extra peace of mind. Also, regarding the tax preparer situation - document everything about your interactions with them (dates you asked for address changes, what they promised, etc.). If they charged you for preparation services but made fundamental errors like missing W-2s and wrong addresses, you may be entitled to a refund of their fees. Many states have consumer protection laws that cover tax preparation services. One thing I always tell people: take photos of every document you're sending with your phone before putting them in the envelope. This gives you an instant backup record with date stamps, which can be helpful if there are any questions later about what you submitted or when. The IRS is generally very reasonable about mail forwarding delays, especially when you can document the timeline clearly. Your situation is more common than you think, and they have procedures in place for exactly this type of scenario. You're handling it exactly right!

I've been reading through all this advice and wanted to add something that might help with your stress level - you can actually check the status of your Form 3531 response online once you send it in. After you mail your response, wait about 2-3 weeks for it to be received and initially processed, then you can call the IRS and reference your case. They can tell you if your documents were received and whether your response adequately addressed all the issues on the Form 3531. Also, I noticed you mentioned being worried about penalties - in most Form 3531 situations where you're just providing missing documentation (signatures, W-2s, SSN verification), there typically aren't additional penalties beyond what might have already been assessed. The IRS mainly wants to complete processing your return, not penalize you for their missing information. One more thing that helped me when I dealt with this - create a simple folder (physical or digital) with everything related to this Form 3531 response. Include copies of what you send, your certified mail receipts, photos of documents, timeline notes, everything. Having it all organized in one place makes it so much easier if you need to reference anything later or if the IRS has follow-up questions. You're really handling this well despite the frustration with the tax preparer! The fact that you're being so thorough and systematic about your response shows you're taking all the right steps.

Something nobody mentioned - when I get S corp refunds I always have them sent to the business checking account, not my personal account. Makes bookkeeping way cleaner. And make sure your CPA e-files! Paper returns take forever to process this year.

Great thread! I'm going through this exact situation with my S corp right now. One thing I learned from my tax attorney is that you should also check if your state has any separate refund processing for S corporations. In my state (California), the state refund comes separately from the federal one and has different timing. Also, if you're expecting a large refund, consider whether it makes sense to adjust your estimated tax payments for next quarter rather than waiting for the refund check. My CPA suggested this approach since it improves cash flow timing - you just pay less in estimated taxes rather than waiting weeks for the government to send your money back. For anyone worried about the direct deposit setup, most CPAs can amend the return to add banking information if it was missed initially, as long as the return hasn't been fully processed yet.