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Memo Addresses Info Disclosure of Divorced, Separated Spouses

APR. 18, 2019

SBSE-05-0419-0010

DATED APR. 18, 2019
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Citations: SBSE-05-0419-0010

Expiration Date: 04-16-2020
Affected IRM:5.1.22

Date: April 16, 2019

MEMORANDUM FOR:
DIRECTOR, FIELD COLLECTION
DIRECTOR, CIVIL ENFORCEMENT ADVICE AND SUPPORT OPERATIONS
DIRECTOR, SPECIALTY COLLECTION OFFERS IN COMPROMISE
DIRECTOR, SPECIALTY COLLECTION INSOLVENCY

FROM:
Director, Collection Policy

SUBJECT:
Interim Guidance on Disclosure of Collection Activities on
Joint Returns for Divorced or Separated Spouses

This memorandum provides interim guidance and clarifies existing guidance on responding to taxpayers who filed joint returns but are no longer married or separated and no longer reside in the same household. This Interim Guidance supersedes the current instructions found in IRM 5.1.22.3.1 and will be incorporated into IRM 5.1.22, Disclosure, within one year of the date of this memorandum. Please distribute this guidance to all affected employees within your organization.

The purpose of this memorandum is to provide case specific examples that Field Collection revenue officers and group managers may encounter during contacts with taxpayers who filed joint returns but are no longer married or separated and no longer reside in the same household.

IRC §6103(e)(8) authorizes the IRS to disclose certain information about the IRS's efforts to collect tax to taxpayers or their authorized representatives, when the taxpayers filed a joint return and are no longer married or separated and no longer reside in the same household. This guidance refers to MFT 30 and MFT 35 joint liabilities and mirrored accounts which reflect MFT 31 and MFT 65. An authorized representative is an individual authorized to practice before the IRS who the taxpayer has appointed to represent him/her before the IRS on a valid power of attorney. (e.g., Form 2848, Power of Attorney and Declaration of Representative).

IRM 11.3.2.4.1.1, Disclosure of Collection Activities with Respect to Joint Returns, provides guidance to employees receiving verbal requests for spousal information. IRM 11.3.2.4.1.1(2) clarifies that, upon receipt of either a verbal or written request from a taxpayer or their authorized representative, the IRS may disclose limited information related to the collection of the tax from the other individual with whom the taxpayer filed a joint return when the taxpayer and the other individual are no longer married or are separated and no longer reside in the same household. Verbal requests will be honored if received from either spouse or his/her authorized representative, after verifying the identity of the person making the request to determine his/her right to the information. Disclosures made pursuant to IRC §6103(e)(8) are limited to the specific tax period associated with the requester's joint deficiency and the information should not be disclosed if its release will seriously impair federal tax administration. Information that shall be disclosed verbally upon receipt of a verbal or written request from a spouse who has been assessed the joint tax will include:

a. Whether the IRS has attempted to collect the deficiency from the other spouse,

b. The amount collected, if any, and the current collection status (e.g., notice, TDA, installment agreement, offer in compromise, suspended), and

c. If suspended, the reason for suspension. (e.g., unable to locate, hardship, etc.)

Information which you cannot disclose includes:

a. The other spouse's location or telephone number,

b. Any information about the other spouse's employment, income, or assets, and/or

c. The income level at which a currently not collectible account will be reactivated.

Refer requests for information concerning divorced or separated spouses beyond that provided for in IRC § 6103(e)(8) or that is otherwise statutorily available pursuant to IRC §6103(e), Disclosure to Persons Having Material Interest, to the Office of Disclosure.

The attachment to this memorandum provides case specific examples that collection employees may encounter during contacts with taxpayers who filed joint returns but are no longer married or separated and no longer reside in the same household.

If you have any questions concerning this guidance, please contact Jana McDaniel, Program Manager, Global Strategic Compliance or Gary Rutledge Jr., Program Analyst, Global Strategic Compliance.

cc:
Director, Headquarters Collection
National Taxpayer Advocate
IRS.gov (www.IRS.gov)


Attachment 1

OIC:

Mr. and Mrs. Taxpayer filed a joint return for tax year 2016. They are now divorced and have mirrored assessments under MFT 31 for the year 2016. Mr. Taxpayer recently submitted an accepted offer in compromise. Mrs. Taxpayer calls in and asks if the IRS has tried contacting her husband as he has told her that he owes no more monies for the 2016 tax year. You review IDRS and see a TC 480, Offer in Compromise Pending and TC 780, Master File Account Compromised posted to her MFT 31 module. While speaking with Mrs. Taxpayer you can tell her that the account does reflect an OIC submission (TC 480) and acceptance (TC 780). You can relay what payments/refund offsets have credited to her MFT 31 and her current outstanding balance.

Continuous Wage Levy:

Mr. and Mrs. Taxpayer filed a joint return for tax year 2016. They are now divorced and have mirrored assessments under MFT 31 for tax year 2016. Mrs. Taxpayer has a continuous wage levy and the payments have credited to Mr. Taxpayer's MFT 31 module. Mr. Taxpayer calls in to ask if the IRS is receiving regular payments from his ex-spouse. While speaking with Mr. Taxpayer, you can tell him that we are collecting monies from Mrs. Taxpayer; each month we are receiving $475.00 that is being credited to his 2016 module. The source of payment however, is not shareable. You also can relay what payments have credited to his MFT 31 module. You can relay his current outstanding balance. You cannot disclose any information about the other spouse's employment, income, or assets.

Bankruptcy:

Mr. and Mrs. Taxpayer filed a joint return for tax year 2016. They are now separated and no longer reside in the same household, and have mirrored assessments under MFT 31 for the year 2016. Mr. Taxpayer is currently in Chapter 13 bankruptcy. Mrs. Taxpayer calls and asks if the IRS has tried contacting her husband. While speaking with Mrs. Taxpayer you can tell her we have been in contact with Mr. Taxpayer and his account is suspended due to bankruptcy status. You cannot disclose when the account will reactivate or what chapter was filed.

Currently Not Collectible:

Mr. and Mrs. Taxpayer filed a joint return for tax year 2016. In 2017, they separated and Mr. Taxpayer now resides in another home. Mr. Taxpayer called to provide financial information and was placed in CNC status. Mrs. Taxpayer called to make a payment and inquired if we contacted Mr. Taxpayer to have him pay on the balance also. Mrs. Taxpayer said she did not know where he was currently living and asked for his current address. While speaking with Mrs. Taxpayer you can tell her that we spoke with Mr. Taxpayer and that he is in CNC status. You cannot disclose at what income level the CNC module will reactivate. You cannot provide her with his new address.

Disclosure of telephone number:

Mr. and Mrs. Taxpayer filed a joint return for tax year 2016. They are now separated and no longer reside in the same household, and have mirrored assessments under MFT 31/MFT 65 for the year 2016. Mrs. Taxpayer currently has an installment agreement. Mr. Taxpayer calls and asks if the IRS has tried contacting his wife. He would like the phone number to contact her to discuss their tax matters. You can advise that we have been in contact with Mrs. Taxpayer and that she has established an installment agreement. You cannot disclose Mrs. Taxpayer's phone number.

Offset Payment:

Recently, Mr. & Mrs. Taxpayer divorced but still have joint tax liabilities that are outstanding for tax years 2013 & 2015. Their joint account was mirrored and each has an MFT 31 for TY 2013 & 2015. Mr. Taxpayer sent in a payment totaling $2,000.00 and it credited to and full paid TY2013. There is still a balance for TY2015 in the amount of $3,500.00. Mrs. Taxpayer called in to set up an installment agreement for the balances. She inquired what the current balances were for both tax years. You can provide Mrs. Taxpayer with the information about Mr. Taxpayer's recent payment amount, which tax year it was applied to, and that TY2013 is full paid and the amount outstanding for TY2015.

Contact Information Request:

You received a call from Mr. Taxpayer's representative to resolve the outstanding balance for TY2016. You recognize that it was a mirrored assessment based on a joint return. The representative would like to set up an installment agreement for $100 per month. He asked what other payments have been applied to the balance. The representative knows that the ex-wife was recently remarried and is trying to locate her but has been unsuccessful. He asks if we have been in contact with the ex-wife and if he can have her contact information. You can provide the representative with the payments applied to TY2016 and the current balance on the account. You cannot provide the representative with the name, address, or phone number for the ex-wife as he does not represent her in these tax matters.

Payment Information Request:

In 2016, Mr. & Mrs. Taxpayer separated and Mrs. Taxpayer relocated to a different state. They filed joint returns for 2015 & 2016 and owe a total of $15,000.00. Both taxpayers filed their individual tax returns for 2017 and their refunds offset to the balance. Mr. Taxpayer called and established an installment agreement for $250.00 per month after he secured new employment with a higher income. Mrs. Taxpayer called in to provide us with a change of address and to inquire about the balance due. She asked if we spoke to her ex-husband and if he is making payments because he is not calling her and he owes her money. You can provide to Mrs. Taxpayer the amount of each credit applied to the balances for TY 2015 & 2016. The credits would include her refund offset, his refund offset, and any $250.00 payment received to date from the installment agreement. You cannot provide Mrs. Taxpayer with the source of her ex-husband's income or the amount of income he is earning.

Seizure and sale activity:

Mr. and Mrs. Taxpayer filed a joint return for tax year 2008. They are now divorced and their joint tax liability has been mirrored. Mr. Taxpayer inherited real property after the divorce that has recently been seized and sold. A significant amount of money has been applied to the 2008 tax year due to the sale proceeds. Mrs. Taxpayer called in advising the ex-spouse states none of these funds will credit to her portion of the 2008 debt. She asks for confirmation of this information. You advise that a payment in the amount of $44,000.00 posted to the 2008 mirrored module for each spouse. You relay the date that it posted and the amount of the outstanding balance.

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