(Decedent's divorced wife's) true "dispute" is recognized: whether she should include the $144,000 distribution as taxable income in the eyes of the IRS. The Form 1099 is merely a piece of paper, and its contents do not determine whether the $144,000 amount is includable in Sandra's gross income for federal income tax purposes,and thus is not a controversy. Moreover, since (1st exwife-Rena) as the personal representative has nothing at stake as to whether Sandra pays income tax on the money, Rena as the personal representative has no interest adverse to Sandra's. The real issue presented is not subject to judicial enforcement by the Douglas County Court, because the law is quite clear that state courts' pronouncements on the nature of a payment are not binding on the IRS' treatment of money under I.R.C. § 71 (2000)... the forum for such determination is not the Douglas County Court; it will be resolved in another forum
Tuesday, December 20, 2005
Nebraska Court of Appeals Judge Sievers insight into tax law: "An IRS Form 1099 is just a piece of paper." Court of Appeals holds that Douglas County Court had no jurisdiction to order a personal representative to cancel out a 1099 form it had issuedIn re Estate of Tizzard, 14 Neb. App. 326 December 20, 2005. No. A-04-618. Divorced spouse of decedent filed a claim for unpaid alimony and through a settlement she received some of the decedent's life insurance. Personal representative issued the ex spouse a 1099, maybe out of spite (PR was the first wife). Ex did not want to have to claim insurance money as income to the IRS so she didnt want to have a 1099 on her record.
Posted by stan_sipple at 2:51 PM