T.C. Memo. 2008-183
UNITED STATES TAX COURT
STEVEN AND VAN LE, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 22413-06. Filed July 30, 2008.
Steven and Van Le, pro sese.
Douglas S. Polsky and Dennis R. Onnen, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
VASQUEZ, Judge: Respondent determined a $1,768 deficiency
in petitioners’ 2004 Federal income tax. The issue for decision
is whether petitioners are entitled to a $6,022 deduction for
alimony paid for the year 2004.
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FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time they filed
the petition, petitioners resided in New Mexico.
On November 1, 1999, Steve Le (petitioner) and Tran Le (Ms.
Le) filed for divorce in the District Court of Sedgwick County,
Kansas (district court). The district court issued temporary
orders which ordered that petitioner pay spousal maintenance to
Ms. Le during the pendency of the divorce proceedings. On
September 27, 2000, petitioner and Ms. Le divorced pursuant to
the Journal Entry of Judgment and Decree of Divorce (divorce
decree) dated September 27, 2000, and filed December 7, 2000.
The divorce decree provided, in part, as follows:
IT IS FURTHER ORDERED as and for spousal
maintenance that the Petitioner [Ms. Le, also known as
Tran B. Tran] shall have a judgment against the
Respondent [petitioner, also known as Phong Le] for
unpaid spousal maintenance ordered pursuant to the
Temporary Order in the amount of $12,000. Said spousal
maintenance shall be taxable income to petitioner and
shall be deductible on respondent’s income tax return.
The respondent shall have thirty (30) days to choose
how to satisfy said judgment by payment or by causing
funds to be distributed from his Rockwell Collins
401(k) Retirement Plan. Respondent shall be allowed to
do so and said $12,000 shall be awarded to petitioner
from respondent’s 401(k) plan as part of the property
division and not as support. Petitioner shall be
responsible for all income tax consequences on said
amount in the event respondent chooses to satisfy said
judgment by and through the 401(k) plan. The transfer
of said funds to petitioner shall be made by Qualified
Domestic Relations Order to be prepared by respondent’s
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counsel. The court shall retain jurisdiction to assist
the parties in carrying out the intent of this order.
If payment is not made within thirty (30) days from the
date of filing this order, the petitioner shall be free
to execute on the judgment, as provided by law.
IT IS FURTHER ORDERED the Respondent shall have no
further obligation to pay spousal maintenance to the
Petitioner other than the judgment described above.
Pursuant to an income withholding order issued by the
district court in 2001, petitioner made payments for past due
support to Ms. Le through the “Kansas Payment Center” (as ordered
by the district court) in 2001, 2003, and 2004 in the amounts of
$4,050, $4,500, and $6,323, respectively.1 Respondent issued a
notice of deficiency to petitioners for 2004 determining a
deficiency after disallowing a $6,022 alimony deduction.2
OPINION
Section 215(a)3 provides that an individual is allowed a
deduction for alimony or separate maintenance payments paid
during the taxable year. For purposes of defining “alimony or
separate maintenance payment”, section 215(b) cross-references
section 71(b). The parties agree petitioner’s payment to Ms. Le
satisfy the requirements of section 71(b)(1)(A), (B), and (C).
1
Amounts are rounded to the nearest dollar. In 2004 the
district court modified the income withholding order to terminate
the income withholding.
2
Petitioner paid $6,323 to Ms. Le in 2004, but petitioner
claimed $6,022 as an alimony deduction.
3
All 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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Section 71(b)(1)(D) requires that “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 Court first reviews the divorce documents to determine
whether a payor spouse satisfies section 71(b)(1)(D). Okerson v.
Commissioner, 123 T.C. 258, 264 (2004). The Court looks to
applicable State law if the divorce documents are inconclusive.
Gilbert v. Commissioner, T.C. Memo. 2003-92, affd. sub nom.
Hawley v. Commissioner, 94 Fed. Appx. 126 (3d Cir. 2004).
The parties agree that petitioner was ordered to pay $12,000
of spousal support pursuant to the temporary orders issued by the
district court. Petitioner was in arrears on the $12,000 of
spousal support due under the temporary orders when the district
court issued the divorce decree. The divorce decree was silent
as to whether the liability for the $12,000 of spousal support
would terminate on the death of the payor or payee. Therefore,
the Court must look to Kansas law.
In Kansas “temporary maintenance ceases when the divorce
action terminates”. In re Marriage of Vientos, 139 P.3d 152
(Kan. Ct. App. 2006). A divorce action is “purely personal and
ends on the death of either spouse.” Wear v. Mizell, 946 P.2d
1363, 1367 (Kan. 1997). In cases where the payor spouse is in
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arrears on support payments but then later pays the amount in
arrears, “the payment retains the characteristics of the original
payments for which it is substituted”. Davis v. Commissioner, 41
T.C. 815, 820 (1964); see also Stroud v. Commissioner, T.C. Memo.
1993-317.
The $12,000 of spousal support was temporary maintenance.
Accordingly, under Kansas law the liability to make such payments
would have ceased on either petitioner’s or Ms. Le’s death
because the divorce proceeding would have automatically
terminated, ending the operation of the temporary orders.
Therefore $3,450 of the payments petitioner made to Ms. Le in
2004, which satisfied in full the $12,000 of spousal support,4 is
deductible as alimony in 2004.
In reaching all of our holdings herein, we have considered
all arguments made by the parties, and to the extent not
mentioned above, we conclude they are irrelevant or without
merit.
To reflect the foregoing,
Decision will be entered
under Rule 155.
4
Petitioner paid $4,050 and $4,500 of the $12,000 of
spousal support in 2001 and 2003, respectively. Accordingly,
only $3,450 of the $12,000 of spousal support remained
outstanding ($12,000 minus $4,050 minus $4,500 equals $3,450).