The Treasury Inspector General for Tax Administration (TIGTA) recently reported that “discrepancies between the amount of alimony deducted by payers and reported as income by its recipients increased by 38% in six years, to $3.2 billion for tax year 2016.” Previously, the TIGTA 2014 alimony tax gap report uncovered a $2.3 billion alimony tax gap for the tax year 2010. However, despite the fact that the IRS accepted most of TIGTA’s recommendations after the 2014 report, TIGTA’s most recent report concluded that the “IRS still lacked sufficient systemwide processes to identify and address alimony discrepancies and ‘has yet to adequately address the substantial compliance gap’ they represent.”
Posted by Jessica Zhang, Associate Editor, Wealth Strategies Journal.
