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Thread: Tax issue RE divorce/debt

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    Tax issue RE divorce/debt

    Hey guys I got a lil dilemma here... I'm doing my taxes, and the good news is that I'm owed a $1000 refund, BUT I'm worried I may not see any of it

    Because, this is my first year filing single, previously I was married and as a couple we owed the IRS several grand. Now, in my divorce decree it states that he is responsible for paying all of the IRS debt we accrued as a couple and that this year we're each on our own, but obviously the IRS doesn't have my decree handy, and it may not protect me anyway against the IRS's definitions of liability, so I'm worried they'll just take my refund to apply to the 'couple' debt and tell me to chase him for reimbursement, which would be an utter waste of my time.

    Thoughts? How can I minimize the chance of them matching married me up with single me and shafting me for his debt? One side of me thinks I should file snail mail with my new name and address and single status and hope for the best, another part of me wants to speak with an IRS agent but I'm worried that might be digging my own grave if they wouldn't otherwise notice. Help!

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    Default Re: Tax issue RE divorce/debt

    So you're worrying for the sake of worrying?

    The IRS won't do that with your refund. If there is something about your return they don't like, you will be involved in the resolution of it.

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    Default Re: Tax issue RE divorce/debt

    Are you legally divorced or seperated but still married..planning divorce? Nonetheless, if there are debts owed while you were married, you have the option of filing the "innocent spouse" claim. Wish I knew more about it, I am investigating myself. From what I understand, this claim is "designed" to protect those of us in these type of situations. Ask a tax consultant.




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    Default Re: Tax issue RE divorce/debt

    you definitely need to file 'innocent spouse' documents with your tax return. If you don't, and if the IRS computers match a tax bill owed to the IRS from last year to your social security number to a refund check due to you this year, they will indeed scarf your refund and apply it to last year's tax bill. Also, the interest and penalty clock has been ticking all this time as well, such that if you don't file 'innocent spouse' documents you will definitely be hit with interest and penalties on last year's unpaid tax bill to boot.

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    Default Re: Tax issue RE divorce/debt

    Thanks for the tips, has anyone here done the innocent spouse thing to provide more specific advice about it?

    FYI we were legally divorced in 06, and he made the vast majority of our money when we were married. Hopefully that's good for my case. And well, if I do get screwed I'll just have my job take out less taxes in the future, I just wish I'd thought of doing that before now so I wouldn't be in this predicament.

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    Default Re: Tax issue RE divorce/debt

    been there, done that ... unfortunately !

    You need to get this cleared up with this year's tax return filing. Remember that as a past tax bill gets more and more overdue, the IRS has lots of other means of collecting it besides simply 'keeping' your tax return - meaning that unless you file 'innocent spouse' forms to inform the IRS that past taxes are the responsibility of your ex not yourself there is nothing to stop the IRS from freezing your bank accounts, garnishing your wages etc. to recover the amount your and your ex owe them.

    On joint return tax liabilities, the IRS makes no distinction as to how much in back taxes must be paid by each of the joint filers. If your ex is broke and if you have assets, the IRS will be perfectly happy to collect the entire tax bill from you if they can ! If you have any doubts about this it's worth involving an accountant if there is a back tax bill for several grand (plus an extra couple of grand in late penalties and interest) at stake. But it's not really all that hard to do - just fill out the IRS form 8857 requesting a 'separation of tax liability' and attach copies of the pertinent pages from your divorce degree where it is stated that your ex is responsible for all accumulated tax liabilities for tax year 2006.

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    Default Re: Tax issue RE divorce/debt

    Thanks Mel! If you know, do you think speaking to an IRS agent would suffice, or are they only interested in gettin as much as possible for the gov as opposed to working in the taxpayers interest? Or if you'd recommend an accountant still, is this like a specialized field I should seek out?

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    Default Re: Tax issue RE divorce/debt

    ^^^ in general, calling / speaking to an IRS employee isn't worth the price of the phone call - because when it comes to non-routine matters they usually aren't very knowledgeable and also because nothing they wind up telling you will be considered authoritative if you are ever audited by a different IRS agent who disagrees with the opinion of the IRS employee that you spoke to originally.

    If your divorce decree / property settlement agreement is very specific in regard to the dates and amounts / percentages of tax liabilities that you are and are NOT responsible for, and if your ex can be trusted to file his own taxes in accordance with the divorce decree, then the need for an accountant isn't all that great.

    However if there is any ambiguity, such that you and your ex may wind up filing 'conflicting' tax returns for 2006, then having an accountant on board will definitely lend credibility to your position when the IRS information audit request arrives. It may also save you several thousand dollars worth of tax liabilities if and when you and your ex are audited versus your ex's accountant / attorney attempting to interpret the joint tax liability in your ex's favor.

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    Default Re: Tax issue RE divorce/debt

    As if this wan't confusing and stressful enough, I got a couple registered letters from the IRS a few days ago, EEP! They were notices to levy, apparently my ex hasn't been making his payments. Initially I was pretty freaked out, but then I noticed/remembered that the letters were addressed to my married name and referenced 'spouse'- so I'm thinking the IRS just doesn't know I'm divorced yet and the innocent spouse docs and explicit divorce decree should take care of everything.

    Just wondering though, in case everything somehow goes to hell... what does it mean for the IRS to 'levy?' Is that like, commandeering bank accounts, garnishing paychecks, seizing homes/cars, or what? He kept the house and I just rent now so I'm not worried there, but I do have a legitimate job they could possibly garnish and 2 cars (both gifts from a relative, noting that b/c it made a difference in the divorce, they were hence NOT considered community property) and a bank account and, well, an ounce of prevention is worth a pound of cure right. Should I be putting my cars in my mom's name about now y'think, or am I being paranoid?

    P.S. Looking for someone to assist me with this in the DFW area, recommends pls?

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    Default Re: Tax issue RE divorce/debt

    ^^^ yup you got it ! If you don't want to risk your own bank accounts being frozen, your own paycheck garnished, and your own car seized, and your own credit ruined you need to QUICKLY get in touch with your local IRS field office and officially inform them of your 'innocent spouse' status. With a notice already issued, you're probably going to have to try and arrange an in-person meeting where you can show an agent your divorce decree. At this point, any attempt to file for 'innocent spouse' status using normal channels is likely to take longer to process than the IRS' levy !

    Moving cars into your mom's name may very well not 'save' them from being seized either at this 'late date' ... as the IRS would perceive this as a deliberate attempt to obscure your assets after receipt of the notice !!!! Trust me on this - right or wrong, you do NOT want the machinery of the IRS to start turning in regard to leveeing YOUR income and assets. Even if this is done mistakenly, it will be very difficult to prove that after the fact if your bank accounts are frozen and if your paycheck is garnished such that you're unable to keep up with your regular bills let alone paying a tax attorney to sue the IRS in an attempt to get your assets back !!!

    You really need to understand that IRS machinery for collection is like a battleship. It takes the IRS a long time to start rolling in regard to collections, but once the 'machinery' is in motion it is VERY difficult to stop - even if that motion was erroneous. Also, once IRS 'machinery' starts moving, it will also set in motion automatic reactions from private lenders - such as banks freezing all of your accounts, credit card companies jacking your interest rates sky high, credit reporting agencies red flagging your credit rating, creditors trying to force YOU into bankruptcy etc. Where the private lenders are concerned, showing them your divorce decree is going to accomplish absolutely nothing. If they have received an order from the IRS they are going to follow the terms of that order until the IRS lifts it.

    I'm trying to say this as politely as possible, but if you want to save yourself a boatload worth of pain, get up right now, go to , find the location and phone number of your nearest field office, spend as much time as needed TODAY to try and arrange an appointment, and then get down there ASAP to clear up the 'innocent spouse' status before the IRS collection wheels start turning against you !
    Last edited by Melonie; 04-13-2007 at 04:08 AM.

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    Default Re: Tax issue RE divorce/debt

    Well FUCK. Enhance calm, enhance calm...

    I contacted a few specialists about it already, and I have ample time to address it as my my vacation starts Tuesday (what a way to spend it though *sigh*). But heyhey, could be worse, at least I do have the docs to back me up, and they don't know where I live. Cross your fingers for me, I'll keep ya apprised in case anyone else lands here.

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    Default Re: Tax issue RE divorce/debt

    and they don't know where I live
    hey, that should provide some degree of protection ... for the next hour or so !


    at least I do have the docs to back me up
    Yup, and ultimately those docs will get you out of whatever trouble the IRS may decide to mistakenly mobilize in your directions. But trust me it will be FAR easier for you to take pre-emptive action to straighten out your 'innocent spouse' status such that the IRS does NOT mobilize in regard to your own accounts / assets.

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    Default Re: Tax issue RE divorce/debt

    E-filed an extension as I'm pretty sure I won't be able to get this all sorted by Monday. Free file is cool! Also have a map and number for my local tax office, planning on camping out come Monday

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    Default Re: Tax issue RE divorce/debt

    ^^^ the extension won't help you with this problem, unless you also sent along a check for all of the back taxes that your ex owes to the IRS !

    Good luck camping out. Unfortunately, this has worked out to be the absolutely worst time of the year to try and get special attention from a human at the IRS.

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    Default Re: Tax issue RE divorce/debt

    Yeah I figure it'll be fricken swamped, and I know the extension won't help the levy notices but I just wanted to have something in by the deadline.

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