The Benefits of Separate IRS Accounts for Married, Separated and Divorced Taxpayers

Services for Real Estate Pros with Richardson Accounting and Tax

Separate IRS Accounts can be created when one or both spouses/ex-spouses are fully or partially liable for a joint tax liability.  The joint liability of each spouse is duplicated on each separate tax account. 

This can occur due to a variety of reasons:

  1. Innocent Spouse Relief
  2. Bankruptcy
  3. Installment Agreement (Payment Plan)
  4. Offer in Compromise (OIC)
  5. Taxpayer Advocate Service (TAS) 
  6. Audits
  7. Appeals

There are situations where married taxpayers with a joint tax liability can benefit by requesting separate accounts. This can occur under various scenarios. An example is an installment agreement setup by the married couple where they could end up paying less with separate accounts compared to one joint account.

Separated and divorced couples can benefit from separate IRS accounts as well. If both owe taxes jointly for one or more years, one or both of them can setup their own installment agreement to pay off the old joint tax liability. They do not have to communicate with each other or reveal their personal/financial information to the other party. Sometimes a married, separated or divorced spouse will refuse to cooperate with an IRS procedure. IRS agreements often require participation and disclosures by each spouse as well as signatures attesting to the matter. By using separate accounts an individual spouse can enter into their own agreement with the IRS without input or involvement from the other spouse. Sometimes the IRS creates the separate account on their own and other times taxpayers have to make a request.

If you are married, separated or divorced and need info about setting up a separate IRS account in order to deal with an outstanding joint tax liability, feel free to contact me

Photo by Edward Cisneros on Unsplash 

Posted by

Howard Richardson

Enrolled Agent

IRS and State Tax Representation

(213) 545-1799

Comments (1)

Mark Don McInnes, Sandpoint-Idaho
Sandpoint Realty LLC - Sandpoint, ID
North Idaho Real Estate - 208-255.6227

Good information Howard.  Much as Real Estate rules change so often when it comes to taxes, I follow my own advice I give to potential clients.  Hire a professional.  Make it a productive week ahead.  Mark

Nov 08, 2021 04:57 PM
Howard Richardson

Thanks Mark. Always appreciate your comments.

Nov 08, 2021 08:08 PM