T.C. Summary Opinion 2007-98
UNITED STATES TAX COURT
ROBERT F. DILLON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17382-05S. Filed June 18, 2007.
Robert F. Dillon, pro se.
Thomas Yang, for respondent.
GOLDBERG, 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. Pursuant to section
7463(b), the decision to be entered is not reviewable by any
other court, and this opinion shall not be treated as precedent
for any other case. Unless otherwise indicated, subsequent
section references are to the Internal Revenue Code in effect for
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the year in issue, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
Respondent determined a deficiency in petitioner’s Federal
income tax for the year 2003 in the amount of $2,497. The sole
issue for decision is whether petitioner is entitled to an
alimony deduction in the amount of $9,000 for the taxable year in
issue.
Background
The stipulation of facts and the attached exhibits are
incorporated herein by reference. At the time the petition was
filed, petitioner resided in River Forest, Illinois.
Petitioner and his former spouse, Ann Dillon (Ms. Dillon),
were married on September 4, 1971, in Cook County, Illinois. Six
children were born of the marriage. On August 31, 1999, a
Judgment of Dissolution of Marriage (Judgment) was entered in the
Circuit Court of Cook County, Illinois, Domestic Relations
Division (circuit court). At the time that the Judgment was
entered, two of the six children, A.D. and B.D.1, were minors.
Sole care, custody, and control of the minor children remained
with Ms. Dillon.
In paragraph D of the Judgment, the circuit court ordered
petitioner to make monthly payments in the amount of $1,500
described as “unallocated support and maintenance.” Paragraph D
1
The Court uses the initials of the minor children.
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also states that the amount of payment will be reviewable upon
the emancipation of A.D., the first of the two minor children to
reach the age of 18. The Judgment is silent otherwise as to the
parties’ intent that the payment or any part thereof, be
deductible as alimony by petitioner and includable as gross
income to Ms. Dillon. The Judgment itself is also silent as to
whether petitioner’s obligation to make the monthly payments
would survive petitioner’s death.
A.D. turned 18 sometime during the year at issue. The
record is silent as to whether, at that time, the amount of the
monthly payments being paid by petitioner was reviewed by the
circuit court.
Petitioner has been employed as a school teacher by
Consolidated High School in Orland Park, Illinois, for the past
15 years. In accordance with the terms of an Order made pursuant
to the Judgment, petitioner’s monthly payments to Ms. Dillon were
deducted from his paychecks. At trial, the Court received into
evidence three paycheck stubs dated August 31, September 15, and
December 15, 2005. Each of these stubs shows a wage assignment
deduction of $755. Petitioner did not have with him at the trial
any of the stubs from the year in issue, however, he claimed that
given the opportunity, he could and would produce the stubs for
2002. At the close of the trial, the Court ordered that the
record in this case would remain open for 30 days in order for
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petitioner to submit either paycheck stubs or a yearend summary
of payments from 2003. Within that time period, the Court
received into evidence a yearend statement from petitioner’s
employer showing total deductions from pay for 2003 of $20,742.
Discussion
The Commissioner’s determinations are presumed correct, and
taxpayers generally bear the burden of proving otherwise. Welch
v. Helvering, 290 U.S. 111, 115 (1933). Petitioner did not argue
that section 7491 is applicable in this case, nor did he
establish that the burden of proof should shift to respondent.
Moreover, the issue involved in this case, alimony, is a legal
one and will be decided on the record without regard to the
burden of proof. Petitioner, however, bears the burden of
proving that respondent’s determination in the notice of
deficiency is erroneous. See Rule 142(a); Welch v. Helvering,
supra at 115.
An individual may deduct from his or her gross income the
payments he or she made during a taxable year for alimony or
separate maintenance. Sec. 215(a).
Section 71(b)(1) defines “alimony or separate maintenance
payment” as any payment in cash if:
(A) such payment is received by (or on behalf of)
a spouse under a divorce or separation instrument,
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(B) the divorce or separation instrument does not
designate such payment as a payment which is not
includable in gross income under this section and not
allowable as a deduction under section 215,
(C) in the case of an individual legally 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.
The test under section 71(b)(1) is conjunctive; a payment is
deductible as alimony only if all four requirements of section
71(b)(1) are present. See Jaffe v. Commissioner, T.C. Memo.
1999-196. Moreover, section 71(c) provides, in pertinent part,
for no deduction of any payment which is payable “for the support
of children of the payor spouse.”
In this case, the monthly payments prescribed under the
Judgment fail to comport with section 71. First, there is no
provision in the Judgment, in accordance with section
71(b)(1)(B), indicating whether the parties intended either the
whole or part of the “unallocated support and maintenance
payments” to be included in income by Ms. Dillon and deducted by
petitioner. Second, there is no provision in the Judgment
imparting liability to petitioner to make payment for any period
after Ms. Dillon’s death in accordance with section 71(b)(1)(D).
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Finally, because the monthly payment prescribed in the Judgment
is for “unallocated maintenance and support” we cannot determine
what portion of the payment is intended for alimony and what
portion is intended for child support. We assume that because
the amount is made reviewable upon the occasions when each of the
minor children turns 18 that some, if not all, of the payment is
intended as child support. In the latter case, if all of the
payment was intended as child support, then petitioner would not
be entitled to any deduction pursuant to section 71(c).
In this case, petitioner did not change, nor did the circuit
court revisit, the amount of the monthly payment when A.D.
reached the age of 18 in 2002. Petitioner, rather, decided that
instead of reducing the amount of the payment, or petitioning the
court to reduce the amount of the payment, that he would “allow
his ex-wife to keep the extra $9,000 and pay the taxes on it,”
thus allowing him to accordingly deduct $9,000 from his gross
income in that year. Petitioner’s decision and reasoning for his
action, however, do not comport with the requirements of section
71(b)(1), as this “payment” so designated by petitioner is not
pursuant to a divorce decree or instrument as required by section
71(b)(1)(A).
Accordingly, and based on the foregoing facts and
discussion, we hold that petitioner is not entitled to an alimony
deduction under section 71 for taxable year 2002.
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Decision will be entered
for respondent.