Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Unspecified Tax Purposes in Marital Settlements
For tax purposes, “alimony” payments meeting the definition in ' 71 of the Internal Revenue Code (IRC) are taxable to the recipient and deductible by the payor. When the definition of alimony in ' 71 was amended in 1984, it was said that the purpose of the amendment was to eliminate the dependence of the definition of taxable alimony on state law dealing with spousal support. Before then, alimony was taxable to the recipient when “received ' in discharge of ' a legal obligation which, because of the marital or family relationship, is imposed on ' the [payor] ' ” The statutory requirement of a “ legal obligation” was interpreted to mean the payor's obligation to support the payee, and that, in turn, required examination of state law and the specific provisions in the settlement agreement or divorce decree (“divorce instrument”) to determine the source of the obligation. Often, this inquiry required consideration of extrinsic evidence to identify the purpose of the payments in question. Under current law, ' 71(b) of the IRC sets out requirements that are said to be objective and independent of state law, obviating the “subjective” search for the support obligation under prior law.
This article discusses two of those requirements: ' 71(b)(1)(B), which provides that a cash payment is taxed to the recipient as alimony when, inter alia, the “divorce or separation instrument does not designate such payment as ' not includible in gross income ' and not allowable as a deduction ' “; and ' 71(b)(1)(D), which provides that the payment is taxable when, inter alia, “there is no liability to make any such payment for any period after the death of the payee spouse, and there is no liability to make any payment ' as a substitute for such payments after the death of the payee spouse ' .” (Emphasis supplied.)
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.