Taxpayer can’t treat attorney fees as alimony, says U.S. Tax Court

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By Pat Murphy

A taxpayer could not deduct as alimony amounts paid for his former spouse’s attorney fees, the U.S. Tax Court has ruled in affirming a $5,600 deficiency assessment.

In 2007, the taxpayer paid $15,000 to his former wife as part of a $68,000 award of attorney fees in their divorce.

He argued that the $15,000 payment of attorney fees could be included in his deduction for alimony on his 2007 Federal income tax return. Section 215(a) of the Internal Revenue Code permits a deduction for the payment of alimony during the taxable year and §71(b)(1)(D) defines alimony for tax purposes.

But the court concluded that the attorney fee payments did not constitute alimony under §71(b)(1)(D) because the taxpayer’s liability would not terminate upon his ex-wife’s death under applicable Florida law.

“Because [the taxpayer] has failed to establish that under Florida law his obligation to have made the disputed payment would have terminated upon the death of his former spouse, the payment does not fit within the definition of alimony for purposes of §§71 and 215,” the court said.

U.S. Tax Court. Brown v. Commissioner, No. 2157-10S. Sept. 28, 2011. Lawyers USA No. 993-3249.