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alimony only if all four requirements of section 71(b)(1) are
present. See Jaffe v. Commissioner, T.C. Memo. 1999-196.
Payments not made under a divorce or separation instrument may
not be deducted by the payor spouse. See Taylor v. Commissioner,
55 T.C. 1134, 1138 (1971). We decide the instant case on the
record without regard to the burden of proof or section 7491.
Petitioner contends that his payments to his thrift savings
plan are deductible for the following reasons:
From the divorce instrument, the Thrift Savings Plan
(TSP) portion of petitioner’s retirement was composed
of a deferred compensation of $88,487.21 with a loan
payoff debt of $25,041.75. The court allotted fifty
percent interest [sic] in the deferred compensation
plan to spouse/former spouse. Clearly this represents
$44,243.60 of deferred compensation with $12,520.88 of
loan payoff debt that are spouse/former spouse’s
interest.
* * * * * *
When deferred compensation is withdrawn from a deferred
compensation plan it is taxable income in the year it
is withdrawn. * * * $44,243.60 being deferred
compensation, when withdrawn must be reported on former
spouse’s tax return. $12,520.88 going to pay a loan
would be considered a withdrawal of deferred
compensation for income tax purposes. The divorce
instrument does direct petitioner to pay off the loan
portion. The petitioner is the only person eligible to
payoff the debt according to TSP rules. Therefore
transfer of the former spouse’s portion of the loan is
only accomplished through payments of the petitioner.
The former spouse’s debt is being paid off and these
payments are a form of income to the former spouse.
I.R.C. Section 71(b)(1) provides that “the term
‘alimony or separate maintenance payment’ means ‘any
payment’ in cash if such payment is received by (or on
behalf of) a spouse under a divorce or separation
instrument.” Were it not for the divorce instrument
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