🤫 Don’t call your accountant

Good morning. The post-Tax-Day quiet has officially set in. The shoebox of receipts is back in the closet, the panic emails have stopped, and your accountant is presumably on a beach somewhere refusing to answer the phone.

This week’s lineup:

Filing 101

💔 The Divorce Tax Rule Nobody Warned You About

Somewhere out there, someone is happily not deducting alimony they’re legally allowed to deduct, because they heard “the rules changed” and assumed it applied to them. Someone else is not reporting alimony as income for the same reason. Both of them are wrong, and the IRS is not particularly interested in the reason.

When your divorce was finalized determines which tax rules govern your alimony.

Finalized before Jan. 1, 2019? Old rules apply. The person paying alimony deducts it. The person receiving it pays income tax on it. This arrangement stays in place unless you formally modify the agreement and specifically elect the new rules.

Finalized Jan. 1, 2019 or later? New rules (courtesy of the Tax Cuts and Jobs Act). The payer gets no deduction. The recipient pays no tax on it. The IRS essentially bowed out of the room.

This is one of those areas where getting it wrong cuts both ways. Payers who miss the deduction leave real money on the table. Recipients who skip the income risk underreporting.

Check your agreement. Check the date. If you’ve modified it since 2018, read what the modification actually says. “My lawyer handled it” is not the same as “I know which rules apply.”

Business & Gigs

🌴 That Free Influencer Trip? The IRS Wants Its Cut

If a brand flies you to Tulum, puts you up at a resort and feeds you for five days in exchange for a few posts, congratulations, you just earned taxable income. Probably $5,000 to $10,000 of it. The fact that nobody handed you a check doesn’t change anything.

The IRS has held for decades that compensation received in a form other than cash is still income, valued at fair market value. That’s the barter rule, and it applies in full to influencer arrangements. A $400 face cream is $400 of income. A sponsored hotel stay is income equal to what you’d have paid to book it yourself. Eight unsolicited PR products you didn’t ask for? Once you post about them, $X of income.

A few things make this especially painful for creators:

The cleanest move is to log every PR package, sponsored trip and gifted service the day it arrives by date, brand, retail value and whether you posted. A spreadsheet works fine. The goal is a record that matches what you report.

IRS Survival Guide

🤫 The “Quiet Disclosure” Trap: Why Non-Filers Need an Attorney

If you haven’t filed taxes in a few years, the instinct is to call your accountant and quietly sort it out. Natural instinct. Wrong call.

A “quiet disclosure,” filing your missing returns without going through an official IRS program and hoping nobody notices, isn’t actually an IRS thing. It’s not a program. It has no protections. The IRS has specifically warned taxpayers against it, which is the kind of warning worth listening to.

There’s no statute of limitations on unfiled returns. The three-year audit clock and 10-year collection clock both start when you file. If you’ve never filed, neither clock has started, and the IRS can come for that 2014 tax year whenever it feels like it.

The bigger problem with quiet disclosure is your accountant can’t shield the conversation. If you sit down with your CPA and explain that you haven’t filed in four years, that conversation has no legal protection. Your CPA can share it.

A tax attorney is different. Attorney-client privilege means you can describe the full situation, warts and all, without your own words becoming evidence later. For non-filers with any uncertainty about their exposure, that’s the entire ballgame. You can’t assess your risk without speaking freely, and you can’t speak freely without privilege.

The IRS has legitimate programs for exactly this situation, like the Voluntary Disclosure Practice for willful non-compliance, the Streamlined Filing Compliance Procedures for non-willful foreign account situations. Both beat hoping nobody notices.

Not sure where you stand or who to call first? TaxQuotes connects you with trained tax pros (including an on-staff tax attorney) who can sort out exactly what your situation needs.

👉 Click here to let TaxQuotes help you today.

Wild Tax Tales

🎵 How the substantial presence test cost Shakira $26.2 million

Colombian popstar Shakira showed up to her tax fraud trial in Barcelona, Spain in November 2023. She left without going to trial, but also without roughly $27 million USD, which is the kind of outcome that makes “settling out of court” sound considerably more cheerful than it is.

The settlement was €17.5 million in unpaid taxes and interest, a €7.3 million fine, and €432,000 to waive a suspended three-year prison sentence. Her defense was that she wasn’t a Spanish resident during 2012–2014. She lived in the Bahamas. Spain looked at how much time she’d spent in Barcelona with her then-boyfriend Gerard Piqué, who played for FC Barcelona, and disagreed.

Spanish tax law considers anyone who spends more than 183 days in the country a resident. It does not care about your feelings on the matter.

This is not just a European celebrity problem. The U.S. has the Substantial Presence Test, which works on the same basic principle. Spend enough days here and you’re a tax resident, regardless of where you think you live. Some states run their own version. California is particularly enthusiastic about it. You can move away, take a job somewhere else, update your driver’s license, and if you still own a place there and visit regularly, California may conclude you never really left.

Days are evidence. If you own property somewhere you spend significant time, keep a record of where you actually sleep. Because “I was just visiting my boyfriend” is a personal statement, not a tax strategy. Shakira learned this. Expensively.

The quick (and slightly prickly) stories we didn’t have time to get to:

If you made it this far, you’re our kind of nerd. Hit reply and tell us which story you want us to dive deeper into next week.