Cancellation of Debt Tax twice on 1 loan

[llamaglama]

Colorado

Hey guys.

I was a co-signer on my Ex's Student loan, well after divorce she let the loan go into collection. So we made an offer.. the payoff was for approx $20,000 we paid $11,500.

Anyway she has made arrangements with the IRS to make payments on the $3000 in taxes for the cancellation of debt.

Now the IRS is coming after me saying I owe them $3000 also. Is that right? it sounds like the IRS is trying to double dip on this one loan.


Thanks guys

 

[Snipes5]

Did you file a joint return that year? If so, the IRS is going after both of you. It's joint debt. When signers on a joint return owe money, they always send the info to both parties.

Contact your nearest IRS office to check this out, but I am sure you will find this is the case.

They will probably continue to contact you until the debt is paid, and may even attach any refunds you are owed. If for some reason she does not pay the debt, they WILL come after you for the remainder, because you both signed the return.

You can adjust your withholding so you owe a little at the end of the year, that way they won't have any refunds to "take".

Snipes