Friend's Refund Affected by Soon-to-be Ex-Husband's Tax Debt - Injured Spouse Form Timing?

This is a common situation, not unlike what happens with student loan offsets or child support debts. In your friend's case, there are two possible approaches, each with different timelines. If she files the Injured Spouse form (Form 8379) now, while her return is still processing, it will likely extend the overall processing time by 8-14 weeks, but it becomes part of the same case. If she waits until after the return processes and the refund is partially or fully offset, she'll need to file the form separately, which could take up to 16 weeks to process from that point, but her original return won't be delayed. Has she received any CP504 notices or anything indicating the debt is actively being collected?

I went through this exact situation last year with my ex's tax debt. According to the IRS website (https://www.irs.gov/forms-pubs/about-form-8379), you can actually file Form 8379 either with your original return OR after you receive an offset notice. In my experience, filing it with the original return seemed to work better, but I'm not 100% sure if that's always the case? My return was held up for about 10 weeks total, which was frustrating but at least I didn't have to file additional paperwork later. Has anyone else had experience with both methods to confirm which is faster?

I dealt with this during my divorce in 2023. My ex owed $12,500 in back taxes and it almost ate my entire refund. I filed the 8379 after my return was processed since I didn't know about the debt beforehand. It took exactly 11 weeks to get my portion back. If your friend files now, she'll save herself the initial offset shock, but either way she'll need to wait. The key is making sure she qualifies under the IRS definition of "injured spouse" - she must have reportable income like wages, taxable interest, etc. and have made tax payments like withholding or estimated payments.

In my professional experience, filing Form 8379 with the original return is generally more efficient, though it may potentially delay initial processing by approximately 6-8 weeks. However, if your friend has already filed and is showing blank transcripts, she might consider calling the IRS directly to inquire about the status and possibly add the Injured Spouse claim now. Getting through to the IRS can be nearly impossible though - I recently had a client use Claimyr (https://www.claimyr.com) to connect with an IRS agent in about 15 minutes instead of spending days redialing. The agent was able to add notes to her account about the pending divorce and potential injured spouse claim, which seemed to help expedite things.

Per Internal Revenue Manual 21.4.6, injured spouse claims filed after an offset has occurred must be processed within 8 weeks from the date of receipt by the IRS. However, during peak filing season (which we're in now), this timeframe is frequently extended. Your friend should be aware that if she waits until after the offset occurs, Treasury Regulation 301.6402-2 gives her only 3 years from the original filing deadline to claim her portion of the refund. I've seen cases where people waited too long and permanently lost their money. Given that it's already April, she should act quickly, especially if she's concerned about the statute of limitations.

I processed hundreds of these cases when I worked at the IRS until March 2023. Here's what your friend needs to know: If she filed on February 5th, 2024 and it's still not processed by now (April 2024), there's likely already a freeze code on her account because of the spouse's debt. The blank transcripts are a telltale sign. At this point, she should file the 8379 immediately - don't wait. The 8379 processing will add approximately 11-14 weeks to her refund timeline, but waiting will only make it worse. Last tax season, injured spouse claims filed after May 15th, 2023 were taking up to 5 months to process due to backlog issues.