13 Jun IRS Announces Increase in Audits of Alimony Deductions and Income
Alimony, also referred to as spousal support, is a regular payment made by one spouse to the other in order to ensure that both parties can maintain their lifestyle following a divorce. This common inclusion in a divorce agreement has important tax ramifications for both parties. The person making alimony payments is entitled to claim this as a tax deduction, while the alimony recipient must include it as income on their taxes.
Recently, a report released by the Treasury Inspector General indicated that many divorced couples haven’t been declaring spousal support payments properly on their income tax forms. According to the report, 567,887 individuals claimed alimony deductions on their income tax returns in 2010.
However, approximately 47% of those deductions weren’t associated with the proper income declarations on the alimony recipient’s tax return. This resulted in approximately $2.3 billion of unreported alimony income.
The IRS has responded to these figures by announcing an increase in audits for individuals claiming alimony deductions or income on their tax returns. Their hope is that an increased focus during the audit process will help improve compliance among individuals paying and receiving spousal support.
Jeffrey M. Bloom has more than 20 years of experience handling divorce cases for individuals in Hudson and Bergen Counties. He understands the tax consequences associated with spousal support payments, and he can help ensure you comply with IRS requirements in order to avoid penalties associated with improper documentation.
If you need assistance with a divorce matter, please contact the Law Offices of Jeffrey M. Bloom today to schedule a consultation. Mr. Bloom serves clients in Hudson and Bergen Counties from his offices in Hackensack and West New York.