Divorce court order has priority over IRS lien.(Brief Article)

Kiplinger Tax Letter, The, August, 2003

A divorce court order has priority over an IRS lien on a pension. A court gave an ex-wife 90% of her ex-husband's retirement plan benefits, but the plan didn't honor the order until several defects were corrected. That way, the order was a QDRO...a qualified domestic relations order. Meanwhile, IRS filed a tax lien on the ex-husband's entire plan balance.

The order was issued before the lien was recorded. Therefore, the ex-wife is entitled to 90% of the benefits, an Appeals Court says. The changes needed to make the order a QDRO were minor (Taylor, 8th Cir.).