Case: U.S. Tax Court Finds Payment to Ex-Wife Non-Deductible as Alimony Due to Lack of Termination Clause (T.C. Memo)

The U.S. Tax Court held that the taxpayer’s payment of $50,000 payment to his ex-wife was not deductible as alimony because it did not terminate upon her death as required by IRC §71(b)(1)(D), affirming the IRS’s deficiency determination. Taxpayer, an individual, received a lump-sum retroactive disability pension payment and paid $50,000 to his ex-wife pursuant to their divorce agreement. The divorce judgment and subsequent consent order were silent on whether the payment obligation would terminate upon the ex-wife’s death. The court held that the payment did not qualify as alimony under §71(b)(1)(D) because the plain language of the agreements created ...