Is it alimony?In a ruling against the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. , the Tax Court underscored that while alimony alimony, in law, allowance for support that an individual pays to his or her former spouse, usually as part of a divorce settlement. It is based on the common law right of a wife to be supported by her husband, but in the United States, the Supreme Court in 1979 must be made under a divorce or separation instrument to be deductible, the payer doesn't have to be legally obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to make the payments. Under IRC (Internet Relay Chat) Computer conferencing on the Internet. There are hundreds of IRC channels on numerous subjects that are hosted on IRC servers around the world. After joining a channel, your messages are broadcast to everyone listening to that channel. [section] 71, cash payments made under a divorce or separation agreement are considered deductible alimony if they are made to an ex-spouse not living in the same household as the payer and are not designated as child support or a property settlement. In addition, the payer must not be liable to make payments after the death of the payee The person who is to receive the stated amount of money on a check, bill, or note. payee n. the one named on a check or promissory note to receive payment. PAYEE. The person in whose favor a bill of exchange is made payable. spouse (a continuing payment liability) or payments in their place (substitute payment liability). In 2000, a court order outlined future payments by Daniel Webb of Reno, Nev., to his ex-wife, Jeanette Webb, but explicitly stated that he had no legal duty to make them. It required him to provide his ex-wife an annual statement of payments and required her to include them as taxable alimony on her tax return. In 2002, Webb paid and deducted from his income $24,000, which the IRS disallowed. The IRS conceded the payments satisfied the requirements of section 71 but said they could not be considered alimony because Webb had no legally enforceable duty to make them. The court disagreed, noting the tax code contains no such requirement. One did exist formerly, but the Deficit Reduction Act of 1984 removed it. Furthermore, Temp. Reg. [section] 1.71-1T, issued as a result of the 1984 act, specifically states that no legal obligation is necessary for payments to qualify as alimony * Daniel Wayne Webb v. Commissioner, TC Summary Opinion 2007-91. Prepared by Charles J. Reichert, CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. , professor of accounting, University of Wisconsin, Superior. |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion