North Carolina Divorce Lawyers Blog

Articles Posted in CPAVille

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by Carolyn J. Woodruff, JD, CPA, CVA
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North Carolina alimony statutes and state case law make technicalities on the “death” element of alimony under federal tax law difficult, and one needs to exercise extreme care when drafting a private alimony agreement or contract in North Carolina.

Unlike many states, all alimony awards in North Carolina are not court orders.  For legitimate strategic reasons, alimony awards are frequently private contracts in North Carolina.  Generally, one cannot modify a contractual award of alimony, but court orders for alimony may be modifiable upon a change in circumstances.  That scares many payors in North Carolina, so they negotiate for a private contract.

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by Carolyn J. Woodruff, JD, CPA, CVA
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Schilling v. Comm’r, T.C. Memo. 2012‑256, 2012 WL 3848477 (2012)

(a) Facts: The parties settled their divorce case by signing a separation agreement. The agreement awarded the wife $2,450 per month on spousal support for six years.  It, further, provided that the wife’s spousal support would drop by specified amounts when each of their three remaining minor children reached age 18 or left home for college, whichever occurred first.  Finally, the agreement provided that the husband would pay no child support, justifying this downward deviation from the child support guidelines by pointing to the spousal support provision. The agreement was incorporated into an Ohio divorce decree. Continue reading →

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By Carolyn J. Woodruff, JD, CPA, CVA
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This article is part 4 of a series of articles regarding Innocent Spouse.  This final blog on the basics of the current Innocent Spouse tax law will do two things:  1) summarize changes discussed in the first three articles; 2) give some practical guidance to attorneys, CPAs, and clients in North Carolina. Continue reading →

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by Carolyn J. Woodruff, JD, CPA, CVA
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Part 3 of a 4-Part Series on Innocent Spouse Basics

(a) The Former Requirements: Rev. Proc. 2003-61, 2003‑32 I.R.B. 296, 2003 WL 21708514 (Aug. 11, 2003)

(b) The New Requirements: Rev. Proc. 2013-34, 2013‑43 I.R.B. 397, 2013 WL 5179241 (Oct. 21, 2013) Continue reading →

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by Carolyn J. Woodruff, JD, CPA, CVA
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This article is part 2 of a 4 part series on Innocent Spouse basics.  Be sure to read all four parts.  Also, check this blog regularly for new information on innocent spouse law, as I will write about it frequently.  I’ll keep you posted of new cases and developments from the IRS.

So, if you are in Asheboro or Reidsville, or wherever, this four part article should answer your questions about innocent spouse tax law and how it might affect your North Carolina divorce.

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by Carolyn J. Woodruff, JD, CPA, CVA
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I have always said:  “the Internal Revenue Service is the third party to the North Carolina Divorce”.  It is, therefore, incumbent upon parties to a divorce, their counsel, and their CPAs in North Carolina to understand the Innocent Spouse rules of the Internal Revenue Code, particularly if there are tax issues outstanding.  Further, understanding innocent spouse can many times help with an otherwise devastating tax situation.

This article will be in four parts, so be sure to read all four parts.  Also, check this blog regularly for updates on innocent spouse law as I will write about it frequently.  I’ll keep you advised of new cases and new rulings from the IRS.

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By Carolyn J. Woodruff, North Carolina Family Law Specialist, JD, CPA, CVA
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I.R.C. § 414(p) and 29 U.S.C. § 1056

Morris v. Metropolitan Life Ins. Co., 751 F. Supp. 2d 955 (E.D. Mich. 2010)

(a) Facts: When the husband and the wife were divorced, the state court divorce decree extinguished all rights held by one in any life insurance of the other.  But the husband retained the wife as beneficiary of his employer-provided life insurance.  Upon his death, the plan paid the proceeds to the first wife, and the husband’s second wife sued to recovery the proceeds. Continue reading →

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By Carolyn J. Woodruff, North Carolina Family Law Specialist, JD, CPA, CVA
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Molinet v. Comm’r, T.C. Memo. 2014-109, 2014 WL 2573992 (2014)

(a) Facts: A husband and wife were married.  The wife was from Cuba and was admitted to the United States on a fiancé visa.  The husband controlled the marital finances, with minimal input from the wife.  She had access to the parties’ joint checking account, but rarely used it and did not have a good understanding of the United States banking system.  She paid her expenses with a weekly allowance from the husband. Continue reading →

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By Carolyn J. Woodruff, North Carolina Family Law Specialist, CPA, CVA
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In North Carolina, as well as nationwide, family law and divorce cases are filled with bad tax returns.  Let’s face it, generally one spouse handles the finances and the other spouse doesn’t.  Enjoy Santa as the Tax Court finds this husband innocent. Continue reading →