Divorce and Tax Debt

By | December 17, 2014

Requesting IRS Installment Agreement

You can request an Installment Agreement (IA) for 2012 and 2013.

Our term for your set of circumstances is called a Front-End Mirror Assessment: the Service will modify your account and your ex-spouse’s account so you both show the full balance due for both tax years (mirrored). Payments you make and credits (like future refunds) that land on your account will be mirrored on her account. Payments and credits to her mirrored side will land on yours. The balance due is 100% yours and 100% hers; it is not split 50/50.


Divorced Spouses with Bad Tax Returns

The mirroring allows payment plans on both sides. If one of the two divorced spouses is not compliant with past tax returns, the Service can move forward with enforced collections (bank levies, wage levies, and Federal Tax Liens) on that spouse, while the other is protected by the terms of the Installment Agreement.


Divorce and Tax Debt

The rep at the Taxpayer Assistance Center (TAC) probably set the Very Slow Moving Wheels in motion, and hopefully followed all the procedures necessary to protect you from the actions described on the notice. They should have explained this process can take 90 days.


Notice CP504

If the notice was a CP 504 (identified in the upper-right corner) for 2013, I suggest you visit the TAC again ASAP and request a notice hold on the 2013 tax year until the mirror process is completed. The hold, per our manual, is supposed to be for 15 weeks.


Notice CP523

If the notice was a CP 523 saying your agreement is in default because of the new balance due, visit the TAC and ask if the appropriate Pending IA transaction was input on the 2013 tax period. You could also call the toll free number on the notice: 1-800-829-0922, or 1-800-829-8374 M – F 7am – 7pm and ask the same questions. The representative will ask some verification questions, research your account, and provide an update if possible.