How to account the filing status for 2005?

Sidney and Angelene was married in 2000. During 2005, they were both employed, eash earning $32,000 for the year. They discovered that there was a significant tax savings if they could file as single taxpayers and thus arranged a vacation trip and a divrce before the end of the year. In January 2006, they remarried. What is their filing status for 2005? Explain. Thanks!
How to account the filing status for 2005?
Doesn't *anyone* else see this is a homework problem she couldn't answer? Is it really that difficult to search for the keyword "divorce" in the FAQ's on the IRS website?
Reply:Yes, I saw this was a homework problem. That's why my answer referred to 'the case your homework describes'. datette did not give an answer to the question. Report Abuse

Reply:If you are married you MUST file as married. With your example, this sham divorce technically allows them to file as single since they were not married as of 12/31/2005. However WHEN the IRS catches them they are in deep dodo!
Reply:Technically, your marital status on Dec 31 is your filing status for tax purposes for the year. In the case your homework describes, be prepared for the IRS to argue the divorce was fraudulent and recompute taxes. I doubt there are any real situations where filing as single would be better than both Married filing Jointly AND Married filing Separately.
Reply:Since it was a sham divorce to save on taxes, their filing status won't change as far as the IRS is concerned. Their choices remain Married Filing Jointly and Married Filing Separately.





IRS Pub 504 http://www.irs.gov/pub/irs-pdf/p504.pdf page 3, left column, very clearly states:





"Exception. If you and your spouse obtain a divorce in one year for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce you intend to remarry each other and do so in the next tax year, you and your spouse must file as married individuals."
Reply:Married filing Jointly is the best option. The IRS will not allow for a married couple to divorce, then remarry the next tax year and still qualify for Single filing status. If they did do this and filed as Single, then they would both have to amend their 2005 returns, and pay back any additional refund they recieved that they shouldn't have, plus any interest and penalties.