Dolores teaches school in Las Vegas, New Mexico. Her husband ran a trucking business, and every spring she signed the joint return he brought home. She filed for divorce in March 2026. By summer the IRS wanted $64,000 for 2022 and 2023, mostly tax and penalties on hauling income that never reached his Schedule C.
Her divorce lawyer is drafting a clause that says he pays the IRS. It helps less than she thinks. Federal law offers better ways out, and New Mexico’s community property rules shape them.
Does a New Mexico divorce decree decide who owes the IRS?
No. On a joint return, 26 U.S.C. § 6013(d)(3) makes the liability “joint and several,” so each spouse owes all of it. In Asad v. Commissioner, T.C. Memo. 2017-80, the Tax Court said a divorce agreement dividing tax debts binds the spouses to each other but “does not control their liabilities to the IRS.” IRS Publication 504 (2025) tells divorced filers the same.
New Mexico’s bankruptcy court applied that idea to state taxes in Chavez v. Internal Revenue Service, Adv. No. 01-1186 S (Bankr. D.N.M. Sept. 27, 2002). The husband had assumed his business’s unpaid taxes in the divorce, yet the court called that allocation “irrelevant of course for third parties such as these taxing authorities.” (The IRS had withdrawn its claim.) The wife kept a claim against him.
What the decree does control is tax between the spouses. Alimony under an instrument executed after December 31, 2018 is neither deductible nor income, because Pub. L. 115-97, § 11051 repealed §§ 71 and 215. Transfers incident to divorce carry over basis with no gain under § 1041. Plans divide by a qualified domestic relations order under § 414(p), IRAs under § 408(d)(6), and head-of-household status follows § 2(b). None of that touches the old joint balance.
How does innocent spouse relief work for a New Mexico spouse?
26 U.S.C. § 6015 offers three routes, all requested on Form 8857. Subsection (b) removes an understatement from the other spouse’s erroneous items if she “did not know, and had no reason to know” of it. Subsection (c) lets a spouse who is divorced, legally separated, or out of the household for 12 months limit her share of a deficiency to her own items. Both are due within two years after the IRS “has begun collection activities” against her; under Treas. Reg. § 1.6015-5(b)(2) a § 6330 levy notice or refund offset counts, but a notice of deficiency or lien notice does not. Equitable relief under (f) covers the rest, including unpaid reported tax, while the ten-year collection period is open (§ 6015(f)(2)).
Here community property helps. Section 6015(a) says every determination “shall be made without regard to community property laws,” and Treas. Reg. § 1.6015-1(f) charges an erroneous item to the spouse “whose activities gave rise to such item.” Under § 1.6015-3(d)(2)(iii), business income belongs to the owner, and under (c)(2) the IRS must prove she actually knew. For (f), Rev. Proc. 2013-34 allows relief on an item charged to her “solely due to the operation of community property law.”
If the IRS denies relief, she has 90 days from the final determination to petition the Tax Court (§ 6015(e)(1)(A)), which since 2019 reviews de novo on the administrative record plus newly discovered evidence (§ 6015(e)(7), added by Pub. L. 116-25, § 1203). Appeals go to the Tenth Circuit (§ 7482(b)(1)(A)), which reviews law de novo and facts for clear error, Jonson v. Commissioner, 353 F.3d 1181 (10th Cir. 2003). I found no Tenth Circuit decision applying (e)(7), and none on § 6015 in 2025 or 2026.
Divorcing With IRS Debt in New Mexico? Contact Us Now
Can the IRS collect one spouse’s tax debt from New Mexico community property?
For joint-return tax the question hardly arises, since the § 6321 lien reaches “all property and rights to property” of each liable spouse. It matters when the tax is his alone.
NMSA 1978, § 40-3-9 treats a debt incurred during marriage as community unless a listed exception, such as a premarital or post-decree debt, applies. Under § 40-3-10, a separate debt reaches the debtor’s separate property and his half of the community, not the other spouse’s interests. Section 40-3-11 sends community debts to all community property first.
IRM 25.18.4.8 limits a spouse’s premarital tax to his half of the community, while IRM 25.18.4.9 treats tax incurred during the marriage as collectible from all of it. In In re Pinon, No. 13-98-10568 SA (Bankr. D.N.M. Mar. 31, 2000), a husband’s partnership tax liability was a community debt reachable by the federal lien. Chavez added that the statutes’ shield for the family home does not reach a tax debt, because “No writing is required for the creation of a tax debt.”
Whether those statutes bind the IRS is less clear. Under United States v. Craft, 535 U.S. 274 (2002), “State law determines only which sticks are in a person’s bundle,” and federal law decides what the lien reaches. Eaves v. United States, 433 F.2d 1296 (10th Cir. 1970), let the government offset a husband’s deficiency against his wife’s community-funded refund, but it predates the 1973 statute. I found no federal decision applying today’s § 40-3-10 to an IRS levy, so I would take that question to New Mexico-licensed counsel.
On separate returns, each spouse ordinarily reports half the community income (IRS Publication 555). Section 66 adjusts that when spouses live apart all year or one hides income, and § 66(c) relieves a spouse taxed on community income she knew nothing about.
What happens to a federal tax lien on a house awarded in a New Mexico divorce?
It stays. Under § 6322 the lien arises at assessment and lasts until paid or time-barred. In Craft, a husband’s one-dollar quitclaim of the home to his wife did not free his interest from the lien. To sell or refinance, the spouse who kept the house generally needs a certificate of discharge under § 6325(b), requested on Form 14135 at least 45 days ahead (IRS Publication 783). See the firm’s post on selling a New Mexico home with a federal tax lien.
Can a divorcing spouse get her own installment agreement or offer in compromise?
Yes. Under the Form 656 booklet (Form 656 rev. April 2026), legally separated or divorced spouses cannot make a joint offer, so each offers on his or her own share, with a separate Form 433-A (OIC). An offer can rest on doubt as to collectibility or on doubt as to liability, a “genuine dispute as to the existence or amount of the correct tax liability” (Treas. Reg. § 301.7122-1(b)). An installment agreement under § 6159, or hardship status under IRM 5.16.1, can follow.
Order matters. A pending relief request bars levies against the requesting spouse through any Tax Court case (§ 6015(e)(1)(B)), and § 6015(e)(2) stops the ten-year clock on “the assessment” for that time plus 60 days. Only she is protected. The IRS can still pursue him, and under the Form 8857 instructions it must contact him and let him participate. In my experience, that is when he offers his own version of who knew what. On the state side, NMSA 1978, § 7-1-17.1 lets a spouse the IRS relieved ask New Mexico for similar relief.
What should a Las Vegas, New Mexico spouse file first, and when?
Illustration only. Her husband moved out March 1, 2026, and on August 3, 2026 the IRS mails Dolores a levy notice under § 6330. Her two-year window for (b) and (c) now runs to August 3, 2028. Waiting risks a continuous paycheck levy under § 6331(e), minus the exempt amount in § 6334(d).
Filing Form 8857 that August stops the levy and puts (b) and (f) in play. Subsection (c) waits until the decree or early March 2027, when the household test is met. Treas. Reg. § 1.6015-1(h)(5) allows a second (c) election once she qualifies, so waiting gains nothing. The decree’s “husband pays” clause will not stop collection if relief fails, but Rev. Proc. 2013-34 § 4.03(2)(d) counts it toward (f) relief unless she knew he would not pay. A (c) allocation refunds nothing (§ 6015(g)(3)), so payments she already made come back, if at all, only under (b) or (f).
| Relief | Who qualifies | Deadline | What it covers |
|---|---|---|---|
| § 6015(b) | Joint filer with no knowledge or reason to know | 2 years after first collection activity | Understatement from the other spouse’s items |
| § 6015(c) | Divorced, legally separated, or apart 12 months | 2 years after first collection activity | Deficiency allocated as on separate returns; no refunds |
| § 6015(f) | Joint filer when (b) and (c) fail | Collection period, or refund period if paid | Understatements and unpaid reported tax |
| § 66(c) | Separate filer taxed on the other’s community income | 6 months before the assessment period ends | Tax on the omitted community income |
Frequently Asked Questions
Does my divorce decree stop the IRS from collecting from me?
No. Joint filers each owe the full tax, and the IRS is not bound by the decree.
Do I have to be divorced to file Form 8857?
No. Relief under § 6015(b) and (f) does not require divorce. Separation of liability under § 6015(c) requires divorce, legal separation, or 12 months living apart.
Can the IRS levy my wages while my request is pending?
Generally not. Section 6015(e)(1)(B) bars levies against the requesting spouse while the request is pending, but the collection clock pauses and interest continues.
Can the IRS take my half of the community for my husband’s premarital taxes?
The IRS manual says a premarital tax in New Mexico reaches only the liable spouse’s half of the community plus his separate property. How the state debt statutes apply to a federal levy is unsettled.
Will my former spouse learn that I asked for relief?
Yes. The IRS must contact the other spouse and let him participate. Its instructions say your personal information is protected.
How North Star Law Firm Can Help
North Star Law Firm handles innocent spouse relief claims for New Mexico taxpayers and negotiates installment agreements and offers in compromise when relief is not the whole answer. Its tax defense practice covers liens and levies too.
Phillip Zagotti, JD/CPA, represents taxpayers before the IRS and the U.S. Tax Court and is admitted to the U.S. District Court and Bankruptcy Court for the District of New Mexico. The firm works alongside New Mexico-licensed counsel on state-law questions. If your divorce is underway and IRS notices are still arriving for joint years, contact North Star Law Firm.