IRS’s Small Business/Self-Employed Division has issued guidance to its employees regarding what collection activity information can and cannot be disclosed with respect to a couple’s joint return, where the couple has subsequently divorced or are separated and no longer reside in the same household. (IRS Memo SBSE-05-0419-0010; Interim Guidance on Disclosure of Collection Activities on Joint Returns for Divorced or Separated Spouses)
Background. If any tax deficiency with respect to a joint return is assessed, the couple are no longer married or no longer reside in the same household, and either joint filer makes a request in writing, IRS must disclose in writing to the individual making the request whether it has tried to collect the deficiency from the other filer, the general nature of those collection activities, and the amount collected. (Code Sec. 6103(e)(8))
IRS guidance to its employees . Upon receipt of either a verbal or written request from a taxpayer or his authorized representative, 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 Code Sec. 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 may be disclosed verbally upon receipt of a verbal or written request from a spouse who has been assessed the joint tax include:
- Whether IRS has attempted to collect the deficiency from the other spouse,
- The amount collected, if any, and the current collection status (e.g., notice, taxpayer delinquent account (TDA), installment agreement, offer in compromise, suspended), and
- If suspended, the reason for suspension. (e.g., unable to locate, hardship, etc.)
Information which IRS employees cannot disclose includes:
- The other spouse’s location or telephone number,
- Any information about the other spouse’s employment, income, or assets, and/or
- The income level at which a currently not collectible account will be reactivated.
Examples . The guidance provides several examples, including the following: (Note that “mirroring” is the process of duplicating a joint account into two “MFT 31” accounts, one for each spouse.)
Illustration 1 : 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 (OIC). Mrs. Taxpayer calls in and asks if IRS has tried contacting her husband as he has told her that he owes no more monies for the 2016 tax year. An IRS employee determines that there IRS records show 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, the employee can tell her that the account does reflect an OIC submission (TC 480) and acceptance (TC 780). He can relay what payments/refund offsets have credited to her MFT 31 and her current outstanding balance.
Illustration 2 . 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 IRS is receiving regular payments from his ex-spouse. While speaking with Mr. Taxpayer, an IRS employee can tell him that IRS is collecting monies from Mrs. Taxpayer; each month IRS is receiving $475.00 that is being credited to his 2016 module. The source of payment however, is not shareable. The employee also can relay what payments have credited to his MFT 31 module. The employee can relay his current outstanding balance. He cannot disclose any information about the other spouse’s employment, income, or assets.
The IRS noted that this guidance supersedes the current instructions found in IRM 188.8.131.52.1.