Chad Hazam - Page 3




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          “is subject to modification only by a subsequent legal writing              
          signed by both parties.”                                                    
               After the divorce, all three children lived with Ms. Hazam             
          until the end of 1991, when Layne moved in with his father.                 
          During 1992 and 1993, when Lexi was away at college, Mr. Hazam              
          reduced his payments, which he sent to Ms. Hazam with handwritten           
          notes characterizing portions of the payments as alimony and                
          child support.  Mr. Hazam wrote in a 1995 letter to Ms. Hazam               
          that he had reduced his child support payments because revenue              
          from his business had declined and Layne and Lexi no longer                 
          resided with Ms. Hazam.                                                     
               On each of his 1992 and 1993 tax returns, Mr. Hazam deducted           
          as alimony approximately $200,000, the amount that he had paid              
          each year to Ms. Hazam.  On her returns for those same years, Ms.           
          Hazam reported approximately $170,000 per year as alimony income,           
          excluding approximately $30,000 as child support.                           
               Pursuant to extensions, Ms. Hazam’s tax returns were due               
          October 15, 1993 and 1994.  Respondent’s records show that the              
          returns were filed on October 20, 1993, and October 25, 1994.               
                                       OPINION                                        
          I.   Alimony and Child Support                                              
               Section 71(a) provides that gross income includes amounts              
          received as alimony.  Section 71(c)(1) provides that alimony                
          shall not include child support.  Section 71(c)(3) provides that            
          “if any payment is less than the amount specified in the [divorce           




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