Are there any people in the know about tax debt and divorces?

Here's my stats:
1. Tax debt is for years 2003-2004.
2. According to divorce, ex is responsible for tax debt. (I was SAHM working on weekends).
3. Innocent spouse relief denied. I did not sign returns but the IRS said I furnished my W-2 and had a history of filing jointly
4. Ex won't discuss with me, keeps telling me it is being handled but I have no knowledge of this.
5. Tax debt is about 20K plus interest piling up.

Here's my questions:
1. Do I talk to IRS or do I need an attorney/CPA/professional something to help me?
2. Can/will the IRS seperate the tax liability based on % of income=% of debt?
3. I can't do OIC if I could qualify for second mortgage, correct?
4. If Ex files bankruptcy, what happens to me?


I guess the IRS's idea is I pay them then go after ex in civil court. They have copy of divorce and informed me it means squat to them. Ex won't pay, he is in contempt on half a dozen things on the divorce settlement as it is.

Oh, 5th question-does the Ex crap ever end???

Before you contact a CPA/attorney, I'd contact the IRS. You formally applied for Innocent Spouse Relief, right? The IRS' response seems odd to me since a return has to be signed to be valid. Was this a formal response? Tell them you are willing to pay the taxes you owe for your income. If you get nasty with them, they won't be very accommadating...not that there's a guarantee they will anyway but it's better to not come off as hostile. Unfortunately, you are usually at the mercy of who happens to answer your call.

Blackraven is right about the innocent spouse stuff...they really can't deny you over the phone. Did you APPLY for it. If so and it was denied you may have the right to have such finding heard in the tax court (you may have a time window within which to object to their finding). For this...you'll need a tax attorney.


1. Can't hurt to talk to them but absent the innocent spouse they may not care much.

2. No

3. Don't know. Been awhile since I filled one of those out but it's a compromise based upon your earnings less your expenses. Pursuing with vigor the innocent spouse defense MAY be your best option...even if it merely delays them garnishing or taking other methods of trying to collect from you WHILE they still try to get xh to pay (he may end up paying it off while your case is pending).

4. You can't bankrupt yourself out of a IRS debt...however, if YOU pay it and then try to collect civilly from him he can go bankrupt to avoid paying you back.

I hope you can find a reasonable attorney to work with in your area. These cases are so difficult and can cost a lot of money just to clear your name. Don't leave any money in the bank anywhere or it could be seized tomorrow. Get paid with a check and not direct deposit because they will know when your payday is and hit it that day.

Good luck,

Mr. Wondering

Actually...talking to them is good as it MAY keep them from seizintg your home or garnishing your wages if you consent to a reasonable payment plan.

You'll have to check in periodically as they will continue to go after your xh and hopefully he'll cough up the money sometime so you can stop paying.

Small payments over time is certainly better than a big seizing hit.

It will also give you time to explore options...like suing your husband civilly for payback for smaller sums that he'll be less likely to go bankrupt on and prompting him with further aggravation to get him to just pay the dang IRS.

W

Thanks for the feedback.

1. Thanks for letting me know that Ex can bankrupt a judgement if I sue him in civil court. Frustrating news, but good to know.

2. I did file for Innocent Spouse Relief and have received a written reply. They stated that they processed the return without my signature.

3. I filed seperately for 2005-06-07 and have received the refund that was due to me in 2007. (Odd to have received a refund if I owed them money).

4. I mailed seperate returns for 2003-2004 after the fact and I owed them money. I sent them what I owed. The newest letter says they applied that money to the joint debt.

5. I feel shady, but I have made plans to get the money out of my savings account and give to family to hold for me.

So, no harm in me talking to the IRS without representation?? I don't want to give money to a third party if I could apply that money to the debt I will be paying on until he// freezes over.

I texted Ex "Are you dealing with the IRS", I have received no response.

Free consult:
http://www.taxincorporated.com/innocentspouse.htm

Can't hurt to get a free consultation and see what the cost is (flat fee). See the FAQ section. It can't hurt talking to the IRS but just stick to the facts and be civil. Document all conversations if you do decided to call them especially if you eventually need to get a third party involved because they can show that you have been trying to resolve this.

Tax law is very technical. Depending on the cost you may want to seek assistance since your time is worth something and it may be worth it and you don't want to lose an appeal on a technicality or expiration of statute of limitations.

There are other avenues to seek relief: Separation of Liability
and Equitable Relief
http://www.irs.gov/individuals/article/0,,id=109283,00.html

I still don't understand how the IRS is holding you liable when you did not sign the return and they acknowledge that. Info in the above link has language in it that says "at the time you signed your return..." Their own technical rules can also have them lose cases as well.

Save your fingers some typing by texting your ex. He obviously doesn't care. Since the IRS had to contact your ex, contact your assigned case worker on your denial letter to find out if he responded to them.

Thanks for the link, I will follow up on that.

I am surprised by the wording about the lack of signature. But it says "The joint return was processed without any signatures".

When they asked for Ex's contact info, I did give them his phone # and I told him they would be contacting him. He told me, at that time, that he was working with an accountant to get it resolved (highly doubtful, that is 3 times he has given me that line). I do not have his address but I do know where he works, I'll find that address and pass it on to the case worker.

Likely, he will ignore it and they will continue after me since I am the one in contact with them.

I have two diiferent case workers, one for the 2003 denial and one for the 2004 denial. Will they likely consolidate the cases or will I be working with two different people?

From the IRS web site:


What we have is a SAHM whose husband had an affair and left her holding the bag for a tax bill. The divorce says he should pay, I made less than 10% of the money and I have filed every year since then (if he has filed, I will eat my socks).

AND THE RETURN WASN'T SIGNED!!

I'm going to end up hating him and that is not good for my kids.

Jean:

Hire a quality, local professional.

Find someone who likes to beat up the IRS. Not every attorney or CPA is comfortable about getting in the IRS's face. Avoid the national chains and the those that advertise too heavily. They charge 20-25% of the tax liability up front, and then put the onus on you to get the info they need and they have lousy followup. Get someone who you can walk into there office.

And THAT'S what you need. ANd you already KNOW that the processes at the IRS take time. And this will not be resolved overnight.

Look where your efforts have gotten you now?

Your 2 Innocent Spouse relief requests were denied. Common. And you accept the IRS's answer. Well, had a professional preped the forms, you may have won. You still can. There ARE appeal processes.

You have provided them info so that they DO know how to ding your accounts for the liability.

The IRS is ignoring there own rules in allowing equitable relief. You qualify for many of the items listed. A tax pro will help you address those potential issues in your next filing with the IRS.

When you call the IRS, you are at the mercy of the individual answering the phone. And they generally DO NOT have a clue. Until you get out of the front lines at the IRS, you are really dealing with the second string. A taxpro with strong relationships with supervisors at the IRS can work wonders for your case.

And keep filing each year. Adjust your W/H so that you owe a little 4/15, and not a refund.

The OIC process is different now, but may be available to you. You will not file as "doubt to ability to pay" but as "doubt as to liability" I would persue Innocent spouse and exhaust all efforts there first, before going to the OIC. However, if you where sitting in my office with your complete file open, I might recommend different.

I would NOT agree to any payment installment plan for the balances due. That gives the IRS de-facto acceptance that you are responsible for the debt. And relieves the IRS of EVER persuing your Ex-H for his debt. I would be sure to make sure that the IRS is regularly apprised of Ex-H current employer and bank account.

Good luck. Your really between the rock and the IRS.

LG

Thanks LG,

Stupid sounding question, but, if I am looking for this professional, what am i looking for...CPA, attorney, tax advisor.

What label in the yellow pages??

Thanks again

J36:

I do not know what state you are in, but I would start with a anyone who you think is a good professional, and ask thier opinion. Ask a doctor about lawyer and CPA. Ask the Attorney about the CPA, and vice versa. Ask specifically about someone who wants to fight the IRS.

Most CPA's DO NOT like to fight the IRS, they like to manage the process, and NOT get thier hands dirty. Attorneys too.

Ask them what the practice mix is, meaning, how much of your revenue comes from confronting the IRS, and not just preparing tax returns. There is a world of difference. My practice does ALOT of tax returns. I confront the IRS, but it is NOT the focus of my practice. I am backing out of this area of practice, somewhat. Most of those clients are like your ExH. They don't want to pay the tax, they do not want to do what they are supposed to do, and they ultimately do not want to pay me. Many accountants and attorneys just avoid this end of the practice area for that very reason.

Confronting the IRS means taking an adversarial approach to the IRS. Filing appeals, meeting in the IRS's offices, and not just sending letters to the service center asking for forgiveness.

So, if you talk to an attorney, or accountant, they all KNOW somebody who isn't afraid of these cases in that respect. And THAT is who you use. You have already been fighting this for a while, and that may make your next steps somewhat limited. So you need to get the MAXIMUM amount of leverage on the IRS in the remaining options that you have.

LG

Thanks LG,

I am in Tennessee so if you have any recommendations, pass them on!

I will call my divorce attorney and see if she has any recommendations. When I look online, all I see are these commercial places where there would be no one on one interaction.

I've also thought of calling Ex boss, he's the richest guy I know, I am sure he has a couple of sharks that work for him. But man, that would really PO the Ex!

I am going to call the IRS today just to find out if Ex has had contact with them, find out the balance due and give them Ex current work location (I don't know where he lives).

J36:

About this:


Call the IRS today? Why? The first thing they want is ALL YOUR INFO. Address, employer, bank accounts, and THEN they will talk to you.

If EX had contact with them? One, they would never tell you, and so what if he did. He certainly didn't call them up and say, "please leave J36 alone and send all the bills to me!" And that's THE only thing he can do to help your sitch.

Find out the balance? You have prior notices. THere is just more Interest and penaly. So what.

If you want to give them his work info, bank account and address, I would send a letter, because when you call them, they will want the info above, and then since your in YOUR account, they don't care about your ExH.

LG

I did just find out his current home address, thru his GF tax assessor info (gotta love the internet).

So your saying that even though I am jointly liable for this debt, they will not give me any info on whether Ex is making payments?

Is there any info I need from the IRS before consulting a professional?

In going through the file, I found a letter from IRS regarding 2004. (I filed seperate returns after the divorce)

It says:
We accept your offer to pay the amount you owe by 2/27/08. The current amount due is 104.17 yada yada yada.

So I paid them before the due date and assumed that they accepted my seperate return and I was clear for 2004.

Now they are saying they don't accept that and have applied that 104.17 to the 10K that Ex owes.

J36:

If you clearly sent the $104 to the IRS with the intent of paying the 2004 balance, and they applied it to an earlier year, then send a letter asking for it to be applied properly.

IF you filed seperatly, then his debt from that year isn't yours.

The IRS reserves the right to apply payments as they see fit, but it does NOT give them the ability to apply it in a completly contradictory fashion. Please be sure to always use a payment coupon from a notice for the taxes you are paying, and put in the memo section of the check "Payment of 1040-2004 taxes, interest and penalty, ONLY) Therefore, your intentions of WHERE the money is to go is clearly stated.

They can't unilaterly move it, when you are clearly trying to payoff a balance for a year.

LG

Hi-

I have not been around in months... first post in forever...

I am a CPA, but I am not a tax guru. Like attorneys we have special areas and mine is audit and consulting. Regardless, you should consult a qualified professional who will help you resolve this. The IRS people you deal with are collections agents whose performance is gauged solely on how much they collect. you case certainly sounds like it has the merits for relief. Find some help, sue ex for fees charged... after he goes bankrupt... Good luck

SMOMW- nice to "see" you again, hope things are going great for you!

Before I consult an attorney/CPA person, should I mail anything to the IRS? What I would mail is the letter stating I owe 104.17 for 2004 and cancelled check. I also have Ex's home address which I have no had until today.

Should I mail this info or wait for consultion with professional before I do anything?

Consult professional... they won't sieze your account for $104

I wound up having to pay the $5400 the X managed to owe for last year as we were still married and wasn't divorced until Jan, 15.

I had to suck it up and she still won.