Why Divorce Decrees Won’t Stop IRS Joint Tax Debt

Elena Carter

Imagine a client walks into your office, clutching an IRS Notice CP14. Let is call her Sarah Jenkins. The notice is dated June first, 2025, and it shows a balance due of forty-eight thousand two hundred dollars for the 2023 tax year, and that is including interest and penalties. Now, Sarah is actually relieved because her divorce from her ex husband, Mark, was just finalized in March 2025. She slides the state court divorce decree across your desk, pointing to the section where the judge explicitly states that Mark is solely responsible for paying this joint tax debt. She looks at you and says, so, I am good, right? The judge ordered him to pay it.

Elena Carter

And this is where we have to shatter what I call the Divorce Decree Illusion. Under federal law, specifically Internal Revenue Code Section 6013(d)(3), when you file a joint return, both spouses are joint and severally liable. The IRS was not a party to that divorce proceeding, so they do not care what the state court decree says. It is completely non binding on them. But here is where the case gets really interesting, and where a lot of practitioners make a critical procedural error. They immediately think, oh, innocent spouse relief, we will file under Section 6015(b) or (c). But we cannot do that here. And the reason is the distinction between an understatement and an underpayment of tax.

Elena Carter

Think of it this way. An understatement is when you, uh, basically lie on the tax return. You do not report all your income, or you claim deductions you are not entitled to, so the correct tax is understated. An underpayment, on the other hand, is when you tell the absolute truth on the return. You file a timely joint return, just like Sarah and Mark did on October fifteenth, 2024, showing forty-two thousand five hundred dollars of tax due. You just, you just do not pay it. You leave the box empty. Well, Section 6015(b), traditional innocent spouse relief, and Section 6015(c), the separation of liability, both strictly require an understatement of tax. Since Sarah's return was properly reported on the joint tax return but never paid, those two options are completely off the table. The only door left open is Equitable Relief under IRC Section 6015(f).

Elena Carter

To get equitable relief, we have to look to Revenue Procedure 2013-34, which outlines the administrative framework, prescribing seven threshold conditions for an equitable relief request. Once those conditions are met, the IRS can make a determination. For Sarah, we have to prove things like the tax was attributable to Mark's Schedule C consulting income, and that Sarah had a reasonable expectation that Mark would pay the tax when they filed. We can document this by showing Mark's past business profits and his representations to her at the time.

Elena Carter

But there is a huge, high stakes calculation we have to make here, and it involves the Collection Statute Expiration Date, or CSED. Under Section 6015(e)(1)(B)(i), once you file Form 8857, no levy or proceeding in court shall be made, begun, or prosecuted against the individual. That sounds great, right? The IRS cannot levy Sarah's bank accounts while the request is pending. But under Section 6015(e)(2), this also tolls, or pauses, the ten year collection statute. If the IRS takes two years to deny Sarah's request, we have just given them two extra years to collect from her in the future. It is a double edged sword.

Elena Carter

Also, remember Circular 230 Section 10.29. You absolutely cannot represent both Sarah and Mark. There is a massive conflict of interest. Even representing Sarah alone, you have to warn her that under Section 6015(h), the IRS is legally required to notify Mark and give him a chance to participate. He might try to sabotage her request to protect himself.

Elena Carter

So, what is the game plan? First, secure Form 2848 for Sarah alone. Pull the 2023 account transcripts to verify the assessment dates. Document her lack of access to Mark's business accounts, and write a detailed statement addressing those seven factors under Revenue Procedure 2013-34. That divorce decree might not bind the IRS, but we can absolutely use it as a factor showing Mark had the legal obligation to pay. And finally, keep a close eye on the calendar for that ninety day Tax Court petition window if the IRS issues a denial. Alright, that is the procedural breakdown for today. Let is get to work.