Our coverage of the recent AICPA Forensic & Valuation Services Conference sparked a few comments from readers concerning the elimination of the tax deduction for alimony that becomes effective December 31. A point made at the conference is that the IRS is expected to follow a strict interpretation of the rule, meaning that a marital settlement agreement must be approved by the court—not just agreed to by the parties—before that date for the alimony to be deductible. One reader mentioned that the court order may have to be stamped and entered before the end of the year for it to qualify. It’s not clear that the IRS would go that far, but, given the lack of guidance on this matter, that would be a safe strategy.

Another reader pointed out that, in some states, marital settlement agreements are not approved by courts. The American Academy of Matrimonial Lawyers (AAML) recently issued an alert about this matter, stating: “The alimony agreement needs to be in a final settlement or court order[emphasis added]—not a temporary agreement—in order to maintain the deduction.”

Bottom line: Consult with a tax expert before making any decisions in your particular case.