- 3 -
also provides for the division of real and marital property, as
well as child support and child custody.
Mr. Garner credibly testified that he did not have legal
representation through the completion of the divorce proceedings,
and that his ex-wife’s attorney assured him that his monthly
payments would be tax deductible. Petitioners also credibly
testified that, at the last minute, the ex-wife’s attorney added
the words “lump sum” into the final draft of the Settlement
Agreement; although suspicious of the change, petitioners could
not, without independent representation, foresee its impact.
Pursuant to the Settlement Agreement, Mr. Garner paid his
ex-wife $9,600 in 2003, and petitioners claimed a deduction in
that amount on their tax return.2 Respondent denied the
deduction and determined a deficiency of $2,400 on the ground
that the payments made in 2003 did not meet the definition of
alimony under the Internal Revenue Code.
2 The fact that this amount was paid through an Income
Deduction Order (wage garnishment) has no impact on the current
proceedings. We note, however, that there appears to be a
discrepancy between the number of payments required under the
terms of the Settlement Agreement and those being enforced via
the wage garnishment.
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Last modified: November 10, 2007