My Ex Is In Jail and Now The IRS Is After My House

Summary

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The Ramsey Show Highlights (May 6, 2026)

Episode Title: My Ex Is In Jail and Now The IRS Is After My House
Hosts: Dave Ramsey, Rachel Cruze, Chris Hogan
Caller: Sarah

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Episode Overview

This episode centers on a caller, Sarah, whose ex-husband is now incarcerated and who has just received notice from the IRS regarding an unexpected $7,900 tax debt from their marriage. She’s struggling with the emotional and financial fallout, especially as she tries to stay on top of her finances and provide for her four children. The hosts walk Sarah through both practical and supportive advice, focusing on potential legal remedies and debt management strategies when facing IRS debt after a divorce.

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Key Discussion Points & Insights

1. Sarah’s IRS Dilemma and Background

• Sarah’s Situation:
  • Receives an IRS notice for $7,900 owed from tax year 2018 (00:06–00:50)
  • Thought the debt was resolved in divorce; ex-husband was responsible but is now incarcerated (for embezzlement) (01:35, 05:47)
  • Recently learned IRS is coming after her for payment, despite no knowledge of the debt (00:57–01:02)
  • Current salary: $132,000; Ex’s former salary: $170,000; Sarah is supporting four kids as a regional asset manager (00:43, 05:41)

2. The "Innocent Spouse" Provision

• Dave’s Recommendation:
  • Before paying, Sarah should consult a Ramsey-endorsed tax pro to see if she qualifies for the IRS “innocent spouse” relief, given her clear lack of knowledge about the debt and the ex-husband’s criminality (01:52–03:43)
  • Explains that in cases like hers, the IRS can relieve the innocent spouse of responsibility for tax debt their spouse incurred without their knowledge (02:15–03:43)
  • "I think you're going to qualify for that. ... That's an $8,000 switch in this conversation." — Dave Ramsey (04:01)

3. If Relief Isn’t Granted: Debt Snowball Advice

• If Not Eligible for Relief:
  • IRS debt must become top priority—goes to front of the debt snowball regardless of prior plans (04:29–04:56, 05:02)
  • "If there is IRS debt, it gets moved to the very front." — Chris Hogan (04:56)
  • Discusses options: pay off quickly, borrow from a credit union, or as a last resort, set up a payment plan with IRS—but avoid the IRS at all costs due to severe penalties (04:29–05:05)
  • Avoid using IRS payment plans unless absolutely necessary; interest and penalties accumulate rapidly (04:31–04:56)

4. Personal Resilience and Support

• Hosts Offer Encouragement:
  • Praise Sarah’s strength as a single mom handling a tough situation and maintaining her financial goals (06:12–06:26)
  • “You've been through some hell, but you are strong. You are strong, and you are smart. I’m proud of you.” — Dave Ramsey (06:12)
  • “Doing the best I know how to do to take care of these kids. ... God is good. And so we’re just trying to make sure I honor him with the next right decision.” — Sarah (06:18)
  • Sarah and hosts reflect on the personal cost of her ex’s actions and her ongoing commitment to her family (06:07–06:31)

5. Notable Quips and Lighthearted Moments

• The hosts react with shock to the layers of Sarah’s story, especially the ex-husband’s embezzlement conviction.
  • “The embezzlement boy is in jail. I mean, wow. ... That’s got, like, drama on it." — Dave Ramsey (05:50)
  • “No way.” — Rachel Cruze (05:49)
• Chris Hogan: “Could save her $8,000 bucks.” (06:43)
• The theme: sometimes "free advice" can be very valuable (06:40–06:45)

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Notable Quotes & Memorable Moments

• On IRS Relief:

  • "I want you to ... see if you qualify for a thing called the innocent spouse." — Dave Ramsey (01:52)
  • “That's why I'm thinking you're going to qualify for this innocent spouse provision, which is an $8,000 switch in this conversation.” — Dave Ramsey (04:01)

• On IRS Debt and Priorities:

  • “It goes to the top of the debt snowball, okay? ... You get rid of the IRS. You do not want these people in your life. They have unlimited power, no brains, and they charge all kinds of penalties and interest minute by minute by minute as you go along.” — Dave Ramsey (04:31–04:56)
  • “It's the one exception of the debt snowball, Sarah. We always say if there is IRS debt, it gets moved to the very front.” — Chris Hogan (04:56)

• On Personal Strength:

  • “You've been through some hell, but you are strong. ... I'm proud of you.” — Dave Ramsey (06:12)
  • “Doing the best I know how to do to take care of these kids. And God is good.” — Sarah (06:18)

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Timestamps for Important Segments

• Sarah explains her IRS dilemma: 00:06–01:02
• Discussion of the "innocent spouse" provision: 01:52–03:43
• Priority of IRS debt in the debt snowball: 04:29–05:05
• Sarah reveals ex’s incarceration for embezzlement: 05:47–05:50
• Hosts encourage and praise Sarah’s resilience: 06:12–06:31

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Summary

This episode provides practical advice and heartfelt encouragement for those blindsided by shared tax liabilities after divorce. The hosts emphasize the importance of checking eligibility for IRS “innocent spouse” relief before paying tax debts incurred by an ex-spouse and explain why IRS debt must always be paid first in any debt repayment plan. Beyond the technical advice, the hosts underscore the caller’s strength and resilience, reminding listeners that with the right help and mindset, even the toughest financial setbacks can be managed.

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Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Sarah]

Well, I had a recent notice received from the IRS for tax debt from a year when I was married to my former spouse. I was unaware of this tax debt because I thought it had been addressed. And I run a really tight budget and I have my debt snowball very planned and I'm wondering if I pivot from that to take care of this tax debt because it had that notice of lien. It hasn't been. There has not been a lien yet. And I realized.

[Dave Ramsey]

How much is it?

[Sarah]

It's $7,900.

[Dave Ramsey]

What do you make?

[Sarah]

I make $132,000.

[Dave Ramsey]

Okay. And what year is this from?

[Sarah]

2018.

[Dave Ramsey]

Okay. And you were obviously married then and you filed married filing jointly that year.

[Sarah]

Yes.

[Dave Ramsey]

Okay. And you were not aware that the taxes were not paid.

[Rachel Cruze]

How much money do you have to make where budgeting is just optional if you chose C. Watch this.

[Sarah]

She makes about 170, I make about 115.

[Dave Ramsey]

Hold on.

[Rachel Cruze]

Did you go back after you paid off everything, borrow some more money?

[Sarah]

Oh yeah. Oh no, Carlos like to go here and there and get this Mercedes and

[Chris Hogan]

oh no, you went full South Beach.

[Rachel Cruze]

It's not just about how much you make. It's about having a plan for what you've got. So start budgeting with every dollar for free today.

[Dave Ramsey]

You were not aware that the taxes were not paid?

[Sarah]

That's correct. We had settled in 2020 and the equitable distribution required that he pay that. And now he's incarcerated. So I think that his payment plan has ceased and they're coming after me for it.

[Dave Ramsey]

Okay. I'm not positive if this will work, but before you decide to pay it, I want you to get in touch with one of our tax [e-mail] that we endorse the Ramsey trusted. And I want you to ask and I want you to tell them every detail of the situation and see if you qualify for a thing called the innocent spouse. Okay.

[Sarah]

Okay.

[Dave Ramsey]

So an example would be, and this sounds like it qualifies, but I'm not, you know, without getting into every stinking detail, I'm not positive and even if we did, I'm not sure I would know. But the innocent spouse provision of the regulate of the IRS code sounds like this. A good example would be me. Okay. My wife is a full time mom, I have a business and we do married filing jointly. The number of minutes or hours she spends looking at our tax return is precisely three and a half seconds. Okay. So she signs it and assumes that me and the tax people that we're using know what the flip we're doing, Right? And then later on, a tax bill comes up, and then she gets some notice in the mail, like you did. Okay, well, obviously she didn't have anything to do with it. And so she could file under the innocent spouse provision and say, yeah, we filed married, filing jointly. Yes, I did sign the return, but I have no working knowledge of that stupid business or that stupid man, okay? And so I'm innocent of this tax bill. And they will take it off of you and send it to him. And of course, he's incarcerated, so they're not going to get paid. But that doesn't matter. What matters is it comes off of you. I think you're going to qualify for that.

[Sarah]

Okay?

[Dave Ramsey]

Based on what you told me. You see what I'm. You see why? Because this is a thing. A, he was supposed to take care of it, and B, it was a lot. Well, long ago. But. But the circumstances were that you had no knowledge that the bills were not being taken care of properly, and you signed the return.

[Sarah]

Correct.

[Dave Ramsey]

And that. That's why I'm thinking you're going to qualify for this innocent spouse provision, which is an $8,000 switch in this conversation. So that's the first thing I want you to do, because I'm like 80, 90% sure you're getting out of this, okay? Now, if you don't. Let's go back to your question. If I'm wrong, okay, then what do we do with the 7900? We put it at the top of the list and we pay it off as soon as you can.

[Sarah]

Okay? Now, my debt snowball.

[Dave Ramsey]

It goes to the top of the debt snowball, okay? And you knock it out as fast as you possibly can, or you go borrow $8,000 from the credit union and pay it off and then put that in the debt snowball. I don't care which, but you get rid of the irs, you do not want these people in your life. They have unlimited power, no brains, and they charge all kinds of penalties and interest minute by minute by minute as you go along.

[Chris Hogan]

Yeah, it's the one exception of the debt snowball. Sarah. We always say if there is IRS debt, it gets moved to the very front.

[Sarah]

Okay, okay. That was my question.

[Dave Ramsey]

Or I would refinance it on a credit card or down to credit union, one of the two. Okay? Get it cleared off, but don't put it on an IRS payment plan unless you have no Other options and then put it at the top of your debt. Snowball.

[Sarah]

Okay.

[Dave Ramsey]

I'm sure hope I'm right about the other thing, though, don't you?

[Sarah]

I certainly do. I didn't know that existed. I do feel it was. It was definitely out of a left field because I've been doing quite well on my own with four kids, but that kind of threw me for a loop.

[Chris Hogan]

Oh, it's so frustrating, Sarah. I'm sorry.

[Dave Ramsey]

So you make $130,000 a year doing what?

[Sarah]

I am a regional asset manager.

[Dave Ramsey]

What is he in jail for?

[Chris Hogan]

Oh, gosh.

[Sarah]

Embezzlement.

[Rachel Cruze]

No way.

[Dave Ramsey]

That makes the story even better about you being an innocent spouse.

[Sarah]

It sure does.

[Dave Ramsey]

The embezzlement boy is in jail. I mean, wow. That's got, like, drama on it. That's so. I'm so sorry. Y' all been through that. And he's the father of your four kids?

[Sarah]

Yes, sir.

[Dave Ramsey]

I'm so sorry. How old are you?

[Sarah]

I'm 41.

[Dave Ramsey]

Man, you've been through some hell, but you are strong. You are strong, and you are smart. I'm proud of you.

[Sarah]

Thank you. Doing the best I know how to do to take care of these kids. And God is good. And so we're just trying to make sure I honor him with the next right decision.

[Dave Ramsey]

You are. You've been very, very wise and very, very. Wow.

[Chris Hogan]

That's hard.

[Dave Ramsey]

That's amazing. Amazing. Yeah. Yeah, Go. Go to our folk, and they'll help you. I think. I'm pretty sure that's going to work.

[Sarah]

Whoo.

[Dave Ramsey]

Hey, you know, sometimes this free advice around here is valuable.

[Chris Hogan]

Could save her 8,000 bucks.

[Dave Ramsey]

There you go.

[Chris Hogan]

Glad she called in.

[Dave Ramsey]

Yeah.

[Chris Hogan]

So then, all the good vibes your way, Sarah.

[Dave Ramsey]

Commission create your free every dollar budget today. The simplest way to life.