# IRS no help-Collection Help Please



## shylynn (May 2, 2013)

I am in need of some answers which when speaking to the IRS in the states they either, will not give me, or the individual I am speaking to does not know the answer. The situation is this: I am a US citizen married to a UK citizen, living in England on a Settlement Visa, scheduled to get my Leave to Remain Visa in three months. A few days ago I received a demand letter from the IRS for taxes from 2008. This was a large liability from a previous marriage which my ex was supposed to have taken care of. When I finally got through to the number on the letter, the agent of course would give me no information on my ex [privacy laws I understand] and informed me I am responsible. I explained I do not have the funds to pay the taxes and after doing a financial statement she suggested I file an Offer in Compromise. Here is where the problems arose. After reading the OIC forms and explaining them to my husband he does not feel [and rightfully so] married to me or not, as a UK citizen, he should be required to report to the US IRS any of his financial information. The house we live in belongs to him and while I am named in his will, I am not on the mortgage or deed, so I have no interest in it. We have separate bank accounts as well. I work for a UK held company as does he. I have no US property, income or bank accounts.
So, my questions are:
1. Can I complete the Offer in Compromise without including his information?
and his question is
2. What are the ramifications if I ignore the letter and do nothing? Can the IRS levy my wages or bank account or his assets?

I realize when I retire in less than a year and start to collect my social security they will levy 15% and while I don;t like it, I can live with that, I just need to decide what to do right now and how to reassure my husband.

Thanks for any help you can give, as I said the IRS agent either didn't want to answer or didn't know, my thought is their objective of collecting money determines what questions they know the answers to, or will provide.


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## BBCWatcher (Dec 28, 2012)

1. No, the OIC path apparently doesn't distinguish between U.S. citizen spouses and NRAs. If you want to take that path you have to report what the IRS asks for, and you can't lie. You could try putting lots of "See Statement 1" entries in your report ("my new spouse is an NRA"), but then the IRS is probably going to think you're using your new spouse to hide assets even if you aren't, or they won't care. OIC is already an exception, in other words.

Have you consulted Tax Topic 205 to see if there's another, better path available? Also, have you had an expert thoroughly examine that year's tax filing to check for errors and possible reductions in the original tax owed? (The expert should also check to see, for example, if you have excess foreign tax credits in other years that can be applied to that year.) Of course, if the IRS is successful in collecting from your former spouse you're much better off, so if you can assist the IRS in doing that they'd probably be receptive.

2. The IRS has many ways to collect money, although they will be at least somewhat slowed down if your assets and income are outside the U.S., depending on the country you live in. Anything held in the U.S. in your name could get slapped with a lein, and you'll be subject to mandatory withholding on financial accounts. Interest and penalties can accrue. You might have to avoid setting foot in the U.S., and the U.S. is considering cutting off passport renewals for those with serious tax problems, though Congress rejected that proposal in the last attempt. (Having another country's passport wouldn't hurt if that's an option, just in case.) It'd help if your NRA spouse is the one with the income and assets (and in his name only), especially if you both live in a country likely to sympathize with the IRS. (The U.K. is probably in that category.) To net it out, you're in the same situation as others the IRS is pursuing, and it's not fun though not the death penalty.

Best of luck.

On edit: The IRS has an office in London, if that's helpful. A face to face meeting may be in order, but consult an expert first.


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## Bevdeforges (Nov 16, 2007)

OK, I think your husband is well within his rights to refuse to divulge his financial data to the IRS. What I would do is to fill out the OIC using just your financial information and indicating that your spouse is an NRA. Don't just ignore the form, but fill it out completely and truthfully using just your financial data (i.e. what you would file for your "married filing separately" status). They don't have the right to go after your current husband's assets, not if he has no filing obligation.

Unfortunately, you are indeed still liable for prior returns filed with an ex - and if they can't get the back taxes out of the ex, they will try to get it out of you. 

You can probably turn to the IRS Taxpayer Advocate program if they don't go for your OIC filed separately. TAS - Your Voice at the IRS 
Cheers,
Bev


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## shylynn (May 2, 2013)

Thank you for the replies. I understand I have to take care of this one way or another as I read all of the legislation concerning the proposed restriction on travel, and while it was pulled from the bill this time, I have learned once something is introduced, it has a way of reappearing, and I do not wish to lose my right to return to the States to see my kids. Bev, I am going to take your advice and complete the OIC with my married filing separate status. The IRS will either accept it or not. I do have another question you may have the answer to, please. On the OIC form one of the questions is, "Have you lived outside the U.S. for 6 months or longer in the past 10 years" do you know why they ask this and what bearing it has on their decision? Just curious. 
Thanks again for your help!


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## Bevdeforges (Nov 16, 2007)

Living outside the US does change some aspects of your tax status (e.g. your eligibility for the FEIE). It also means you are subject to another country's tax laws. Answer the question truthfully - and mention that you are currently resident outside the US. I suspect it can only help the situation.
Cheers,
Bev


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## shylynn (May 2, 2013)

Thanks Bev. It was my intention to answer yes, I was just curious as to why they asked, and your reasoning makes perfect sense. I am working on the OIC and the real challenge is converting everything from pounds to dollars, then of course when I am done with the form there is the explanation to attach. However, as the saying goes, nothing ventured, nothing gained. 
Thanks again for your help!


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## shylynn (May 2, 2013)

It has been 7 months since my original post, however it I believe I can FINALLY say the issue is now resolved. HOWEVER! it has been a very long, stressful process, and one I would wish on on one, ever! Chain of events-

When I responded to the original letter with my intention to file and Offer in Compromise I was told the IRS also had no record of 2 of my previously filed tax returns. Unfortunately all my records were destroyed when the storage unit in the States where they were was ruined. This required the agent sending me W-2 info so I could refile. I completed the OIC with just my income, bank info and half of the household expenses, listing my husband as a NRA.


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## Bevdeforges (Nov 16, 2007)

Congratulations! You're past the hard part. Now you just need to keep on filing going forward. Good work, in any event.
Cheers,
Bev


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