Paul Edwin Farrow - Page 4

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          support, $471 per month for spousal support, and an additional              
          $25 per month for child care expenses.  The March 1999 order                
          contained instructions (the instructions) to the payor limiting             
          the amount that could be garnished to 50 percent of petitioner’s            
          “disposable earnings”.2  The instructions stated that “If 50                
          percent of the Obligor’s net disposable earnings will not pay in            
          full all of the assignments for support, prorate it first among             
          all the support assignments in the same proportion that each                
          assignment bears to the total current support owed.”  However,              
          the instructions further stated that “When this Order is for                
          child support or family support, it has top priority over a                 
          similar order for spousal support.”  The March 1999 order was in            
          effect and had not been modified by or during 2002.                         
               On the basis of the March 1999 order, approximately $441 was           
          withheld from petitioner’s military retirement account3 and paid            
          directly to his former spouse.  Petitioner made no other payments           
          to his former spouse during 2002.  On his 2002 tax return,                  
          petitioner deducted as alimony $5,301 paid to his former spouse             
          and claimed the section 32 earned income credit.                            

               2According to the instructions, disposable earnings means              
          earnings remaining after subtracting items required to be                   
          withheld by Federal and State law, for example:  Federal income             
          tax, Social Security tax, and State income tax.                             
               3Petitioner retired from the U.S. Air Force in 2000.  The              
          actual amount garnished varied slightly from month to month based           
          on cost of living increases.                                                

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