- 6 -
apply and the payments must be included in the payee’s income if
they otherwise meet the requirements of section 71(a). See
Commissioner v. Lester, 366 U.S. 299, 303 (1961). Any indication
of an intent to allocate a portion of a payment as child support
which is not an express provision of the instrument fixing it as
such is insufficient to cause the section 71(b) exception to
apply. See id.
It is clear in this case that the divorce instrument did not
fix any portion of the family support payments as child support.
Consequently, despite the evidence that the payments under the
instrument were in fact primarily for support of the children,
they do not meet the requirements for the exception under section
71(b). We therefore sustain respondent’s determination that
payments received by petitioner under the judgment of divorce
must be included in her income.
The second issue for decision is whether petitioner is
liable for accuracy-related penalties under section 6662(a).
Respondent determined that petitioner is liable for an accuracy-
related penalty imposed by section 6662(a) for the entire
underpayment of tax in each of the years in issue because these
underpayments were due to negligence or disregard of rules or
regulations.
Section 6662(a) imposes a 20-percent penalty on the portion
of an underpayment attributable to any one of various factors,
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011