T.C. Summary Opinion 2004-21
UNITED STATES TAX COURT
WILLIAM ROBERTSON MCSKIMMING III, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17953-02S. Filed March 5, 2004.
William Robertson McSkimming III, pro se.
Warren P. Simonsen, for respondent.
PANUTHOS, Chief Special Trial Judge: This case was heard
pursuant to the provisions of section 7463 of the Internal
Revenue Code in effect at the time the petition was filed. The
decision to be entered is not reviewable by any other court, and
this opinion should not be cited as authority. Unless otherwise
indicated, subsequent section references are to the Internal
Revenue Code in effect for the year in issue, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
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Respondent determined a deficiency in Federal income tax of
$6,448 for the 2000 taxable year. The issue for decision is
whether unallocated support payments constitute “alimony or
separate maintenance payments” that petitioner may deduct under
section 215.
Background
Some of the facts have been stipulated and are so found.
The stipulated facts and the related exhibits are incorporated
herein by this reference. At the time of filing the petition,
petitioner resided in Edgewater, Maryland.
Petitioner was previously married to Sandra L. McSkimming
(Ms. McSkimming). They have three children: (1) Brian
McSkimming (Brian), born October 28, 1978; (2) Daniel McSkimming
(Daniel), born June 14, 1981; and (3) Megan McSkimming, born May
23, 1984.
On May 27, 1993, Ms. McSkimming filed an action for divorce
in the Supreme Court of the State of New York, County of Erie
(New York court). Petitioner executed a stipulation on March 18,
1994, entering into a pendente lite arrangement in which he would
pay Ms. McSkimming the sum of $400 per week “as and for
unallocated family support, commencing immediately.” The
stipulation noted:
That in consideration for the above referenced family
support, the Plaintiff, SANDRA L. McSKIMMING, shall be
responsible to pay for mortgage payments on the marital
residence, homeowner’s insurance at the marital
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residence, gas/oil, electric, telephone, water/sewer,
cable, food, and piano and dancing lessons pending the
trial and determination of this action.
A judgment of divorce was filed with the New York court on
January 23, 1996.
Certain unresolved financial issues were addressed during a
proceeding on June 28, 1996, before an Official Matrimonial
Referee of the New York court. Ms. McSkimming and petitioner
were both represented by counsel, who entered into the following
oral stipulation on behalf of their clients:
[Ms. McSkimming’s attorney]: With respect to
maintenance, Mr. McSkimming agrees to pay to Mrs.
McSkimming the sum of fifteen thousand dollars per year
for five years, and then an additional ten thousand
dollars a year for the next three years for a total of
eight years. It’s been agreed that if Mrs. McSkimming
either remarries or co-habits with someone who is not a
relative, which she is doing now, she will still be
entitled to one-half of the balance of the maintenance
due at the time of her remarriage.
* * * * * * *
[Ms. McSkimming’s attorney]: With respect to the
issue of -- the maintenance shall be paid on a weekly
basis. With respect to the issue of child support --
[Petitioner’s attorney]: Excuse me. Mr.
McSkimming will continue to pay the four hundred
dollars per week unallocated maintenance and support
until Mr. Cinelli completes his report and we have a
subsequent order with regard to maintenance and child
support.
[Ms. McSkimming’s attorney]: Yeah. With respect
to the child support, right now there is not an
agreement as to the –- either applicability or non-
applicability of the Child Support Standards Act as
there are some issues, as [petitioner’s attorney]
eluded [sic] to, to be investigated by Mr. Cinelli.
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Therefore, that prior order shall continue, and upon
Mr. Cinelli’s report back to the Court, we will then
hopefully come to an agreement on the amount of child
support to be paid, or, if not, we will, of course, set
it down for further proceedings to make that ultimate
determination. But we are not making that
determination today.
* * * * * * *
THE REFEREE: * * * It would seem to me that once
that visitation schedule has been set, it is simply a
matter of calculation between yourselves and your
attorneys as to how to then prorate the amount of
support that’s going to be paid and how to break out of
the present unallocated support, the figure of support
and maintenance. Therefore, you shouldn’t have to
appear in front of the Court so long as there is
cooperation with Mr. Cinelli with regard to setting
forth some reasonable visitation. * * *
There was no further proceeding to fix a specific amount as
to child support.
Ms. McSkimming had remarried by 2000.1 Petitioner
nevertheless paid Ms. McSkimming $400 per week during 2000, for a
total sum of $20,800.2
During the year in issue, petitioner and Ms. McSkimming had
joint custody of their three children. Ms. McSkimming had
physical custody, while petitioner had the right to reasonable
and liberal visitation.
1
Petitioner is uncertain of the year when Ms. McSkimming
remarried, believing that her remarriage occurred sometime from
1996 to 1998.
2
The record indicates that Ms. McSkimming did not include,
in her Federal income tax return for the 2000 taxable year, any
portion of this amount as gross income under secs. 61(a)(8) and
71(a).
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Petitioner filed a timely Form 1040, U.S. Individual Income
Tax Return, for the 2000 taxable year. Petitioner claimed a
dependency exemption deduction for Daniel and a deduction for
alimony paid in the amount of $20,800.
Respondent determined that petitioner was not entitled to a
deduction for alimony paid for the 2000 taxable year.
Discussion3
Payments to support children generally are not deductible.
Sec. 71(c). However, alimony or separate maintenance payments
generally are deductible by the payor spouse. Sec. 215. Alimony
or separate maintenance payments are defined by section 71(b),
which provides in part:
SEC. 71(b). Alimony or Separate Maintenance
Payments Defined.--For purposes of this section--
(1) In general.–-The term “alimony or
separate maintenance payment” means any payment in
cash if--
(A) such payment is received by (or on
behalf of) a spouse under a divorce or
separation instrument,
(B) the divorce or separation instrument
does not designate such payment as a payment
which is not includible in gross income under
this section and not allowable as a deduction
under section 215,
(C) in the case of an individual legally
3
Since there is no material factual dispute, we decide the
issue in this case without regard to the burden of proof. See
sec. 7491; Rule 142(a); Higbee v. Commissioner, 116 T.C. 438
(2001).
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separated from his spouse under a decree of
divorce or of separate maintenance, the payee
spouse and the payor spouse are not members
of the same household at the time such
payment is made, and
(D) there is no liability to make any
such payment for any period after the death
of the payee spouse and there is no liability
to make any payment (in cash or property) as
a substitute for such payments after the
death of the payee spouse.
We look to the terms of the applicable instrument, or to
State law, if the instrument is silent on the matter. See Kean
v. Commissioner, T.C. Memo. 2003-163. Under New York law, child
support is “a sum to be paid pursuant to court order or decree by
either or both parents or pursuant to valid agreement between the
parties for care, maintenance and education of any unemancipated
child under the age of twenty-one years.” N.Y. Dom. Rel. Law
secs. 236, 240 (McKinney 2003). In contrast, an award of
“maintenance” shall terminate upon the death of either party in
an action for divorce or upon the recipient’s valid or invalid
marriage. Id. sec. 236. Upon application of either party, a New
York court may annul or modify any prior order or judgment as to
maintenance or child support. Id.
In the present case, Ms. McSkimming had physical custody of
the children during the year in issue. Moreover, she had
remarried before 2000, and pursuant to the oral stipulation of
June 28, 1996, one-half of any balance of maintenance payments
became due at the time of her remarriage. Petitioner
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nevertheless continued to make payments of $400 per week in 2000.
If such payments were for alimony or maintenance, as petitioner
contends, his obligation to make such payments would have ended
either under New York law or under the terms of the oral
stipulation. His continuing to make payments after Ms.
McSkimming’s remarriage and her physical custody of the children
are factors that militate in favor of characterizing such
payments as for child support and not for alimony or separate
maintenance.4 We sustain respondent’s determination regarding
this issue.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for respondent.
4
We realize that, of petitioner’s three children, Brian
was at least 21 years old during 2000 and that New York law
defines child support as “a sum to be paid * * * for care,
maintenance and education of any unemancipated child under the
age of twenty-one years.” N.Y. Dom. Rel. Law secs. 236, 240
(McKinney 2003) (emphasis added). However, under New York law,
petitioner would still have to make child support payments at the
full amount until he filed an application with a New York court
and received approval to modify such payment amount. In any
event, even if they were alimony payments, they would be
voluntary and as such would still not be deductible by
petitioner.