In Uncategorized on 04/20/2013 at 21:11

With a respectful bow to Wm Blake, I’m returning to a previous blogpost “No Good Deed”, 4/18/13, and the story of Danial Robert Martin and Christina Martin, 2013 T.C. Sum. Op. 31, filed 4/17/13.

You’ll remember than Danial wanted to help his unemployed, sickly ex-wife Ruth by increasing her spousal support, without going back to court. After all, they both agreed, she needed the money, and what judge would say no?

Danial wanted a deduction for alimony, and he had been taking one for the previous three years at the rate fixed by their divorce decree, with no apparent ill effects.

But there was no contemporaneous documentation of the increase, so IRS torpedoes Danial’s enhanced deduction, and CSTJ Panuthos agrees.

Now why do I rehash this? Because fellow tax blogger Peter Reilly over at Forbes picked up on Danial’s plight and discoursed at length on the unfairness of the result; and he very kindly mentioned I had blogged the case first. But Pete omitted CSTJ Panuthos’ rationale for his decision.


If one party pays a deductible expense, the receiving party must recognize  income. Now whether the receiving party’s recognition triggers taxation of that income is another story. But income there must be.

CSTJ Panuthos: “Allowing petitioner to deduct the increased payments to Ruth under sec. 215(a) would result in an asymmetry, since the increased payments were not made pursuant to a written divorce or separation agreement, and would therefore not be includible in Ruth’s gross income under sec. 71(a).” 2013 T. C. Memo. 31, at p. 7, footnote 2.

Again, see my blogpost “The Magic Paper Saves the Deduction”, 4/7/11.

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