Question of the Day

Alimony payments are tax deductible for payers and taxable for recipients. Among people who claim these deductions, what portion of their tax returns show alimony payments that are either not reported or discrepantly reported by the alleged recipients?

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A recent IRS Inspector General analysis found that 47% of tax returns with alimony deductions claimed payments "for which the corresponding income was either not reported on a recipient's tax return or the amount of alimony income reported did not agree with the deduction taken." This amounts to "a discrepancy of more than $2.3 billion in deductions claimed without corresponding income reported."

DocumentationInspector General Report Tax Noncompliance