Will I have to repay alimony taxes?

Question

I am court ordered to pay my deceased husbands alimony to his ex-wife...long story. I pay the money monthly from my IRA.

The agreement states that I can withhold her portion of the tax liability. I always do this but on some years I have been able to write the taxes off. Do I owe her that tax money back? My accountant says that she can never get hold of my tax returns..even if she goes to court. I must pay her for all of her life. She is 79.

Answer 1

Unless you have forwarded the withheld taxes to the IRS, she should be getting that money.  

You can deduct the alimony that you paid.  If you paid an amount, and kept back taxes, but did not forward those taxes to the IRS on her behalf, then you can deduct only the amount you paid her.  

You cannot withhold taxes, not pay those taxes, and deduct those taxes.  If she raises the issue with the IRS that you withheld taxes, and you didn't pay those taxes, you are going to have some grief.

Short answer:  You have to pay her any taxes that have been withheld that you have not paid to the IRS.

Answer 2

Use your attorney for this advice, it is what you pay him or her for.

Answer 3

Alimony (the high cost of leaving) is taxable to the recipient and deductable as an adjustment to the person paying it. I'm not going to touch the issue of the ex having access to your tax returns.

Answer 4

I would recommend you seek the advise of a financial counselor. Someone from your bank or financial management team.

It seems as if there may be a conflict between tax law and an alimony agreement.

NATP - National Assoc Tax Professionals can give you a referral. Just visit their website.