William E. Johnson - Page 6

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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               When deferred compensation is withdrawn from a deferred                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               is withdrawn.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               compensation, when withdrawn must be reported on former                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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