In Uncategorized on 04/06/2020 at 15:57

Belongs on a Bottle, Not An Alimony Payment

Family lawyers should have rejoiced as 2017 became 2018, as their obsolete and oft-copied boilerplate concerning expiry of alimony payments when a child reaches the age of 18 years could no longer torpedo a Section 215 deduction. Because there were no more until maybe 2026. But they forgot the Bard of Avon’s warning: “The evil men do lives after them.”

Here’s Timothy Clinton Biddle, 2020 T. C. Memo. 39, filed 4/6/20. In Tim’s case, the divorce decree separated alimony (then deductible) and child support (nondeductible) into two separate amounts. But neither that nor the amendment thereto removed the septic clause that alimony would continue to be payable: “…until the occurrence of one of the following events: (1) the youngest child’s 18th birthday, (2) the wife or husband’s death, (3) the wife’s remarriage at the five-year point or anytime thereafter, or (4) the wife becomes self-supporting.” 2020 T. C. Memo. 39, at p. 4.

Tim says he and ex-Mrs Tim never intended the 18th birthday cut off. Too bad, says Judge Vasquez. “In defining alimony section 71(b) does not list the parties’ intent as a factor. Thus, the Court cannot rely on the intent of the parties in determining whether a payment should be characterized as alimony for Federal income tax purposes; it must apply the explicit requirements listed under section 71(b). Therefore, petitioner’s argument that the parties intended that the designated alimony payments would continue indefinitely, regardless of the contingency relating to his youngest child’s 18th birthday, is unavailing. That the designated alimony payments were also subject to termination contingencies relating to petitioner’s ex-spouse does not change this result.” 2020 T. C. Memo. 39, at p. 8. (Citation omitted, but Judge Vasquez cites a case I blogged in my blogpost “The Phone Call,” 4/15/14.).

Creating separate pockets of dollars and labeling one “child support” and the other “alimony” doesn’t prevent Section 71(c)(2) from tearing off the labels and picking both pockets.

IRS magnanimously spares Tim, pro se, retired military, the Section 6662 chops.

Dear family lawyers, leave the 18 year olds in the drinks cabinet. And save a wee dram for me.


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