Susan has practiced as a CPA for over 30 years. Many of her clients are individuals who file as married filing jointly. Unfortunately, long-time clients Pam and Kevin are separating and planning to file for divorce. Susan learns of this while preparing their 2017 tax return in early 2018. She has met with both clients, and they agree to file their 2017 tax return as married filing jointly rather than married filing separately. On the surface, they appear to be amicable and Susan files the 2017 Form 1040 timely by April 15, 2018. Both Pam and Kevin contact Susan in late April asking for advice regarding the pending divorce. Kevin would like to be divorced by the end of 2018 and Pam would like to wait until 2019. The couple have two dependent children, ages 10 and 8. From what Susan has learned, the final divorce agreement will require Kevin to pay support payments to Pam, \($1,000\) per month for child support and \($3,000\) per month for alimony. Both Pam and Kevin want the best advice that will help their tax situation. What should Susan do? (Answer as if you were providing this advice during 2018.)
In addition to the chapter content, see Statements on Standards for Tax Services at https://future.aicpa.org/resources/toolkit/statements-on-standards-for-tax-services, Circular 230 at www.irs.gov/tax-professionals/circular-230-tax-professionals, and Chapter 3, LO4, Tax Professional Responsibilities.