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I had a somewhat similar situation with a freight broker client for many years. In Quickbooks and on their financial statements, we would show gross billings and then use a contra-account to reduce gross revenue by the amount of the payments made to the carriers. The contra-account showed up as a negative revenue entry. We did this in order to have a better handle on the "true" net revenue in evaluating operations. From an accounting standpoint, this was essentially the same as having a cost of goods sold entry. But on the tax return, I would simply move the amount of the contra-account into "other expenses" for tax reporting. Operational net income was the same by either method, so the tax return agreed with the books. But I'm sure it would have required some explaining if an audit had ever come our way.

Even on a couple who are still married, and still filing joint, I have had problems with this. If spouse makes the estimates using their IRS account, the estimates are credit to their social security number and may not be credited on the joint return. What a broken system!