[randybowman]

I have been offered an offer and compromise from the IRS on back taxes. I am getting divorced and my wife has a larger income. She is willing to give me a down payment on a condo as part of our divorce settlement. I know that IRS has 3 years to recoup the full amount of back taxes if a person comes into money during that time. Would my divorce settlement be exempt or would IRS take it?

[AtlantaTaxExpert]

It is likely the IRS would try to take the divorce settlement. The best way t handle it is to have your ex-wife make the condo down payment directly to the seller of the condo, with her relinquishing any rights to the condo.

That would be considered a gift by her, and she may have to file a gift tax return to report the gift, but the Unified Credit will likely prevent her from actually paying any gift tax.