T.C. Summary Opinion 2007-112
UNITED STATES TAX COURT
JACK DANIEL CHAVEZ, SR., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 23941-04S, 2374-06S. Filed July 2, 2007.
Paul S. Braun, for petitioner.
Kathleen Schlenzig, for respondent.
GOLDBERG, Special Trial Judge: These cases were
consolidated and heard pursuant to the provisions of section 7463
of the Internal Revenue Code in effect at the time the petitions
were filed. Pursuant to section 7463(b), the decisions to be
entered are 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
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Internal Revenue Code in effect for the years in issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
Respondent determined deficiencies in petitioner’s Federal
income taxes for the years 2002 and 2003 in the amounts of $4,563
and $4,237, respectively. The sole issue for decision is whether
petitioner is entitled to an alimony deduction in the amount of
$16,937 for each of the taxable years in issue.
Background
The stipulation of facts and the attached exhibits are
incorporated herein by reference. At the time the petitions were
filed, petitioner resided in Lansing, Illinois.
Petitioner and his former spouse, Debra Chavez (Ms. Chavez)
were married on September 4, 1971, in Cook County, Illinois.
Three children were born of the marriage. On June 7, 2001, 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, one of the three children was a minor.
In paragraph 1.2, Article I, of the Judgment, the circuit
court ordered petitioner to make monthly payments described as
“unallocated child support.” Paragraph 1.3, Article I, states
that the payments would cease on October 1, 2003, the 19th
birthday of petitioner’s youngest daughter. The Judgment is
silent otherwise as to whether the payments or any part thereof,
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were to be deductible as alimony by petitioner and includable as
gross income by Ms. Chavez. The Judgment itself is also silent
as to whether petitioner’s obligation to make the payments would
survive Ms. Chavez’s death.
In addition to the aforementioned Judgment, petitioner
submitted, and the Court received into evidence, over
respondent’s objection, three additional orders of the circuit
court. The first, entered on June 18, 2003, required petitioner
to pay $705.74 to Ms. Chavez every 2 weeks as “unallocated child
support and maintenance” until a rehearing scheduled for August
20, 2003. In this order, the circuit court judge designated that
$604 of the $705.74 be characterized as “maintenance.” Although
the record is silent on the matter, we assume that either this
rehearing did not occur or petitioner continued to make these
payments of his own accord through the end of 2003.
The second order, entered on July 23, 2004, required that
petitioner pay $757.52 to Ms. Chavez monthly for a period of 12
months. Finally, a third order, entered on August 30, 2005,
required that petitioner pay $600 per month to Ms. Chavez through
October 5, 2005. In his petition, petitioner maintains that
these orders show that at least a portion, if not all, of the
unallocated child support paid by petitioner to Ms. Chavez in
2003, 2004, and 2005, was for maintenance and accordingly, should
entitle him to alimony deductions in taxable years 2002 and 2003.
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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 these cases, nor did he
establish that the burden of proof should shift to respondent.
Moreover, the issue involved in these cases, alimony, is a legal
one to be decided on the record without regard to the burden of
proof. Petitioner, therefore, bears the burden of proving that
respondent’s determinations in the notices of deficiency are
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,
(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
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(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, any payment which is payable for the support
of children of the payor spouse is neither includable in income
under section 71 nor deductible under section 215. Section
71(c)(2) provides that if any amount specified in the divorce or
separation instrument will be reduced on the happening of a
contingency relating to a child, such as attaining a specified
age, the amount of the reduction will be treated as child
support.
In this case, because the monthly payment prescribed in the
Judgment is for “unallocated child support” it is clear that
these payments were for child support only. The Judgment, in
fact, ends these payments upon the youngest child’s 19th
birthday. In short, all of these payments were child support,
and petitioner is not entitled to any deduction for the payments
pursuant to section 71(c).
Moreover, we are unconvinced by petitioner’s argument that
the intent of the parties is not reflected in the Judgment
because the term “unallocated child support” is oxymoronic and
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accordingly, void for vagueness. We cannot think of any reason
why the payments would have been characterized as child support
in the Judgment if they were not intended to be for the support
of the minor child.
Finally, we consider payments made by petitioner to Ms.
Chavez in taxable year 2003. Specifically, we consider the terms
of the order dated June 18, 2003, which required petitioner to
pay $705.74 every 2 weeks to Ms. Chavez, and whereby $604 of that
amount was designated as “maintenance” through August 20, 2003.
Petitioner contends that he should be entitled to a deduction for
all of the payments that he made pursuant to this order in 2003.
Respondent, in fact, conceded that petitioner is entitled to a
deduction in the amount of $3,926 for taxable year 2003, which
represents 6½ payments made by petitioner to Ms. Chavez under the
June 18, 2003, order. Accordingly, we must now decide whether
petitioner is entitled to a deduction under section 71 for the
balance of payments that he made in that year pursuant to the
June 18, 2003, order.
In this case, because the order specifically delineates that
$604 of the $705.74 payment be for “maintenance” and the
remainder, $101.74, be for “unallocated child support”, it is
clear to us that this portion of the payments was intended for
child support only. In accordance with the aforementioned
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section 71(c), we sustain respondent with respect to the balance
of the payments made under the June 18, 2003, order.
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 and is not
entitled to a deduction in 2003 for the balance of payments in
excess of “maintenance” made pursuant to the June 18, 2003,1
order.
In docket No. 23941-04S,
decision will be entered for
respondent. In docket No.
2374-06S, decision will be
entered under Rule 155.
1
As they are dated in 2004 and 2005, respectively, we will
not address the other orders previously discussed.