When people pay alimony to ex-spouses, they can deduct those payments from their income, lowering their tax bill. Their ex-spouses are then required to claim the alimony payments as income when they file their federal tax returns.
The numbers, however, often don’t match — by a lot.
The IRS inspector general said Thursday that more than half-a-million taxpayers reported paying a total of $10 billion in alimony in 2010. Their ex-spouses, reported receiving less than $8 billion, for a $2.3 billion gap.
Inspector General J. Russell George says the IRS should do more to resolve the discrepancies. The IRS says it is improving computer filters to help catch the mismatches.
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