What happens when a married couple owes taxes for a previous year but are now divorced? Will the IRS hold refund money from both parties equally?

[scott_e_wilson]

We still owe for 2023 income taxes from when we were married. Will any refund received individually be applied equally to the outstanding balance or will the former primary spouse have to bare the brunt?

[MaryK4]

If you filed a joint return with a balance due, you and your ex-spouse are joint and severally liable for the tax debt.  The IRS will collect from both parties.  The tax refund from either or both will be used to pay the debt, and it is not necessarily equally.  

[scott_e_wilson]

Thank you! I figured that would be the case, but I wanted my suspicions confirmed. Is there a benefit for us filing at about the same time, or does it not matter?

[SusanY1]

There isn't any real benefit to either of you filing at the same time.  However, they will likely apply the refund from the first return filed, though, so the two of you may want to discuss how you want to handle refund amounts as they are likely to take different amounts from each of you - taking as much as possible from the first return, and additional amounts, if needed, from the second.  

For example if you owe $5,000 and there is a $6,000 refund on the first return, they will hold $5,000 from that one and refund $1,000.  If the balance owed exceeds the full refund, they will take all of the refund from the first spouse and then take the remaining balance from the second.  

 

[Opus 17]

The only thing you can try is to apply for innocent spouse relief.  You would either argue that you owed the tax on a joint return because of shenanigans by your spouse that you didn't know about (even though you signed a joint return) OR that even though you both owe the tax, it would be more equitable for it to be paid a different way than the IRS decides to take it.

I don't think the odds are very good with this, and I would wait to apply until after your return is processed and you find out if and how much of your refund is offset for the debt. 

https://www.irs.gov/individuals/innocent-spouse-relief

[NikiB]

This is my situation except I filed single last year also divorced at end of last year. The forms 8379 and 8357 both say you can’t complete form unless filed jointly.. what can I do?

[Vanessa A]

If you did not file a joint return when you were married, you are not responsible for your spouses tax liability.  

Please provide more details as to why this is your situation?

[NikiB]

Prior tax debt from 2019 and 2021 when married, were on a payment plan with IRS 500$ a month, lived separately all of 2024, divorced December 2024. Out divorce agreement included us filing single for 2024. He made much more than me last year as I was out of work for 6 months. My tax refund was a little over 8k unsure of his tax refund. If we divided the remainder of our tax debt I would owe a little over 6k however the IRS took my whole return. I should have close to 2k returned as overpayment. In speaking to a representative at the IRS I was told I could file a 8379 and maybe also 8359. However it says if you did not file jointly you cannot complete this form. Now of course we filed jointly for prior years however this past year that is in question was single. What should I do to ensure my portion of my taxes are considered paid off and get the remainder I’m due? Thanks!!

[Vanessa A]

You would file form 8379 for 2019 and 2021.  It is for the debt for THOSE years.  You would not include it with your return for this year, instead you would just file the form on its own.  You would need your tax records for those years to allocate the income and tax debt due to each person properly.  

[Opus 17]

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@NikiB  wrote:

Prior tax debt from 2019 and 2021 when married, were on a payment plan with IRS 500$ a month, lived separately all of 2024, divorced December 2024. 

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Form 8379 is not for this situation.  Form 8379 or "injured spouse relief" is used when one spouse has a tax debt from before the marriage.

Here, you have tax debits that occurred during the marriage when you signed a joint return.  In this case both ex-spouses are equally and severally liable for the tax debt, meaning the IRS can collect from either one or both spouses, including collecting from whichever spouse is easier or has more money or a larger refund.  

What you need is separation of liability, or equitable relief.  These are both sub-types of innocent spouse relief and are applied for on form 8857.  This is a request to the IRS for them to consider that your portion of the tax debt has been paid, even though they are entitled to collect the entire debt from you if they want to. 

https://www.irs.gov/individuals/separation-of-liability-relief

[Opus 17]

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@Vanessa A wrote:

You would file form 8379 for 2019 and 2021.  It is for the debt for THOSE years.  You would not include it with your return for this year, instead you would just file the form on its own.  You would need your tax records for those years to allocate the income and tax debt due to each person properly.  

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I believe you mis-read the question.  The tax debt arises from MFJ returns filed while the parties were married.  They became divorced in 2024.  Injured spouse is not applicable to a joint debt from during the marriage.  The taxpayer needs to ask for separation of liability or equitable relief on form 8857.