- 7 -
Porter v. Commissioner, T.C. Memo. 1996-475; Eatinger v.
Commissioner, supra; Denbow v. Commissioner, supra. Accordingly,
we hold for respondent.
Petitioner contends that she should be entitled to a credit
equal to 20 percent of the tax withheld from Col. Fulgham’s
military retirement pension. We observe, however, that the
credit for withheld tax does not enter into the computation of a
deficiency under section 6211(a) and (b)(1). See Porter v.
Commissioner, supra; Eatinger v. Commissioner, supra. In any
event, as we noted in Eatinger v. Commissioner, supra, because
the district court's authority to divide a community military
retirement pension is limited to the amount that is net of income
tax, all tax withheld is attributable to the service member
spouse; i.e., Col. Fulgham.5
5 This fact does not, as petitioner seems to think, lead to
double taxation. This is demonstrated by the following example:
Assume that the member’s military retirement pay is $50,000, that
$5,000 is withheld for tax, and that the spouse’s share of the
net amount (i.e., $45,000) is 20 percent, or $9,000. The spouse
pays income tax on $9,000, and the member pays income tax on
$41,000 (i.e., $50,000-$9,000). Thus, only $50,000 of income is
taxed. The fact that the $5,000 of withheld tax is attributable
to the service member means that it is available to the member as
a credit against the income tax on the member’s $41,000 share of
the military retirement pay. Although it is true, as petitioner
correctly points out, that 20 percent of a net amount (or 20
percent of $45,000 in the example) is less than 20 percent of the
gross amount (or 20 percent of $50,000 in the example), this fact
means only that the spouse whose divorce was effective before
Feb. 3, 1991, receives less than the spouse whose divorce was
effective on or after such date.
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011