Bay Area Family Law

Tuesday, April 3, 2007

Tax Court Decides 'Family Support' Payments are Tax-Deductible as 'Alimony'

Tax Smart America® reported that an important tax court case heard in San Diego California, the United States Tax Court has held that some portion of family support payments are considered to be tax deductible as “alimony” payments.

In the case, BERRY vs. COMMISSIONER T.C. Memo 2005-91 the United States Tax Court held that some portion of what was defined as family support payments are to be considered tax deductible as “alimony” payments as determined under the facts in this case.The case began with the taxpayer being represented by Tax Smart America® Corporate Offices in the filing of amended tax returns based upon the analysis that some portion of the support payments appeared to represent “alimony.” The refund claim was denied by IRS, and shortly thereafter, San Diego Tax Attorney, Gary M. Erickson was contacted to move the matter into federal tax court.

The case was heard and was decided in favor of the taxpayer, in what many are calling an important case that will have far reaching impact on family law settlements. According to San Diego Family Law Attorney, Robert J. Steinberger, “This case will cause some need for review in support settlements in many divorce cases.”

Tax Smart America® recently announced it is well underway in its nationwide launch of the Tax Smart America® Business Center License Program to tax professionals, as an alternative to old-style franchise models.

The company has created a number of business support programs offered only at an approved Tax Smart America® Business Center. Clients who use an approved tax professional under the program are invited to attend business support workshops to better understand basic operations from payroll to recordkeeping. A business client is then free to select from a variety of business support services and engage the approved Tax Smart America® Specialist to assist in implementing these important services much like a team approach in developing an overall game plan for the business client.

The company’s expansion plans are an effort to give small and mid-sized CPA and Tax Firms with an alternative to the more traditional expensive old-style franchise systems, such as those of H&R Block (HRB), Jackson-Hewitt (JTX), and Liberty Tax Services.

Tax Smart America® released its “Business Center” license program in cooperation with Entrepreneur® magazine with advertising on the popular magazines website. With estimates reported at more than 60,000 to 70,000 new business start ups each month, the company believes its plans are well positioned to attract tax professionals of all types away from competitors who seem to remain fixed on the more traditional franchise and corporate-owned store model, as well as independent tax firms who desire the benefits offered in the business license models.


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