Divorce increases the likelihood of IRS scrutiny, especially when returns differ, income is in dispute, or property settlements trigger capital gains. Proactive tax compliance and documentation are essential.
Common Audit Triggers in Divorce
- Conflicting income or dependency claims between spouses
- Undisclosed income uncovered during litigation
- Alimony or legal fee deduction disputes
- Sale of jointly owned real estate or business
Steps to Protect Yourself
- File accurate and timely returns, even if your spouse does not
- Retain documentation for all property transfers and support payments
- Get written agreements on dependency exemptions and filing treatment
- Work with a CPA to review prior years’ returns for exposure
If audited, a forensic accountant can help defend your position, prepare substantiation, and mitigate penalties.