Why is the IRS after my ex-wife?

[Watson03]

What is the name of your state?I reside in Texas but this occurred when I lived in Louisiana. After my wife and I seperated in 2002 I sold our home in a short sale; I sold the home for about five thousand less than what I owed the mortgage company and they agreed to write off the rest. Now my ex-wife comes to me and shows me the paperwork she is getting from the IRS saying she owes them $55,000 (that is the right number of zeros) all resulting from the sale and payoff of that home. She never worked that year but the IRS insists that she had an income of $154,000. From what I can make of the paperwork, it looks like they are taxing her on the sales price of the house plus retaxing her on that money when we paid off the mortgage company. The value of the home was about $75,000. Incidentally, I have never been contacted by the IRS myself. Does this make any kind of sense to anyone, or any ideas who I can contact to resolve this? The local IRS office has been no help and neither has the 1-800 # for the IRS.