T.C. Summary Opinion 2010-2
UNITED STATES TAX COURT
MICHAEL RAYMOND GLATFELTER, SR., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 29405-08S. Filed January 11, 2010.
Michael Raymond Glatfelter, Sr., pro se.
Jon D. Feldhammer, for respondent.
LARO, Judge: This case was heard pursuant to the provisions
of section 7463 of the Internal Revenue Code in effect when the
petition was filed.1 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.
1
Subsequent section references are to the applicable
versions of the Internal Revenue Code. Rule references are to
the Tax Court Rules of Practice and Procedure.
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Petitioner petitioned the Court to redetermine respondent’s
determination of a $1,487 deficiency in petitioner’s 2006 Federal
income tax. The issue for decision is whether petitioner may
deduct as alimony a court-ordered $4,000 payment for his former
spouse’s legal fees attributable to their divorce, of which he
claimed a deduction of $3,400. We hold he may not.
Background
Some facts were stipulated. The parties’ stipulation of
facts and the exhibits submitted therewith are incorporated
herein by this reference. Petitioner resided in California when
his petition was filed.
The marriage of petitioner and his former wife was nullified
in October 2003. Since that time, petitioner has paid $200 per
month to his former spouse as spousal support.
On June 15, 2006, after a property settlement hearing on May
22 of that same year, the Superior Court of California entered a
“Findings and Orders After Hearing.” In relevant part, the court
ordered the following:
1. Petitioner, MICHAEL R. GLATFELTER, shall pay four
thousand dollars ($4,000) forthwith towards * * * [his
former spouse’s] attorney fees and costs.
2. The * * * [former spouse’s] request for modification
of spousal support is denied pending trial.
Petitioner timely filed a Form 1040, U.S. Individual Income
Tax Return, for 2006. On that return petitioner claimed an
adjustment to gross income for alimony payments totaling $5,800.
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On September 26, 2008, respondent issued petitioner a notice of
deficiency disallowing the adjustment. Respondent concedes that
petitioner may deduct $2,400 of the $5,800 as alimony.
The $3,400 that remains at issue is attributable to the
court-ordered payment of $4,000 for petitioner’s payment of his
former spouse’s attorney’s fees. Petitioner claimed a deduction
of $3,400 because he paid only that much of the $4,000 during
2006.
Discussion
I. Burden of Proof
Generally, the Commissioner’s determinations in a notice of
deficiency are presumed correct, and the taxpayer has the burden
of proving that the determinations are erroneous. See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). In certain
circumstances, however, section 7491(a)(1) places the burden of
proof on the Commissioner. Because the facts are not in dispute,
we decide this case without regard to the burden of proof.
II. Deduction of Attorney’s Fees as Alimony Expense
An individual may deduct the amount of alimony or separate
maintenance payments paid during the taxable year. Sec. 215(a).
Whether payments constitute “alimony or separate maintenance
payments” for purpose of section 215(a) is determined by
reference to section 71(b)(1), which provides:
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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,[2]
(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
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 such payment (in cash or property) as a
substitute for such payments after the death of
the payee spouse. [Emphasis added.]
Respondent concedes that petitioner’s payment of his former
spouse’s attorney’s fees and costs satisfies the first three
subparagraphs of section 71(b)(1). The parties lock horns on
whether the payment at issue satisfies subparagraph (D); that is,
2
The term “divorce or separation instrument” means (A) a
decree of divorce or separate maintenance or a written instrument
incident to such decree, (B) a written separation agreement, or
(C) a decree (not described in (A)) requiring a spouse to make
payments for the support or maintenance of the other spouse.
Sec. 71(b)(2).
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whether the obligation to pay the court-ordered attorney’s fees
and costs would have terminated in the event of the death of
petitioner’s former spouse.
Under section 71(b)(1)(D), a payor must have no liability to
continue payments after the recipient’s death in order for those
payments to constitute alimony. See Johanson v. Commissioner,
541 F.3d 973, 976-977 (9th Cir. 2008), affg. T.C. Memo. 2006-105.
In deciding whether payments are alimony under section
71(b)(1)(D), the Court must first examine the divorce or
separation instrument to determine whether it contains a
provision that terminates the payor spouse’s liability for a
payment upon the death of the recipient spouse. If the
instrument is silent as to the existence of a postdeath
obligation, the Court will then look to see whether the payment
terminates upon the recipient spouse’s death by operation of
State law. See Sperling v. Commissioner, T.C. Memo. 2009-141.
California law provides that “Except as otherwise agreed by
the parties in writing, the obligation of a party under an order
for the support of the other party terminates upon the death of
either party or the remarriage of the other party.” Cal. Fam.
Code sec. 4337 (West 2004). California law also provides that a
court in a marriage dissolution proceeding may order one party to
pay the other party’s attorney’s fees and costs. Cal. Fam. Code
sec. 2030 (West Supp. 2009). Cal. Fam. Code sec. 2030 provides
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that such fees and costs may be awarded for legal services
rendered or costs incurred before or after the commencement of
the proceeding. That section does not provide that the payor’s
obligation to pay these fees and costs terminates upon the death
or remarriage of the other spouse. Id.
California courts have differentiated attorney’s fees from
spousal support. For example, in Newport v. Newport, 201 Cal.
Rptr. 647, 648 (Ct. App. 1984), the court held that, under the
statutory predecessor to Cal. Fam. Code sec. 2030, the remarriage
of a former spouse did not preclude her right to attorney’s fees
in a postdissolution proceeding. Moreover, California caselaw
holds that the death and remarriage provisions of Cal. Fam. Code.
sec. 4337 should be interpreted “in a similar fashion.” See
Johanson v. Commissioner, supra at 977 n.1; see also Cesnalis v.
Cesnalis, 131 Cal. Rptr. 2d 436, 439 (Ct. App. 2003).
Petitioner claimed as an alimony deduction a $3,400 expense
payable to his former spouse for attorney’s fees and costs.
Pursuant to section 71(b)(1)(D), petitioner may deduct as alimony
only those expenses his liability for which does not survive his
former spouse’s death. In the Findings and Orders After Hearing,
filed as a property settlement on June 15, 2006, the Superior
Court of California ordered that “Petitioner, Michael R.
Glatfelter, shall pay four thousand dollars ($4,000) forthwith
towards * * * [his former spouse’s] attorney fees and costs.”
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The court order also stated that his former spouse’s “request for
modification of spousal support is denied pending trial.” The
order is silent as to whether petitioner’s liability for the
attorney’s fees and costs would extend beyond the death of his
former spouse.
Accordingly, this Court must determine whether petitioner’s
$4,000 liability would have terminated upon his former spouse’s
death by operation of California law. It is clear that the
Superior Court of California in its order sought to distinguish
between attorney’s fees subject to Cal. Fam. Code sec. 2030 and
spousal support payments subject to Cal. Fam. Code sec. 4337.
The court order contained two separate provisions--the first
mandating petitioner’s payment of his former spouse’s attorney’s
fees, and the second denying his former spouse modification of
petitioner’s spousal support payments pending trial.
In addition, California caselaw provides that attorney’s
fees derived from a postdissolution proceeding do survive a
remarriage of the payee spouse. See Newport v. Newport, supra.
The Court of Appeals for the Ninth Circuit has decided that the
remarriage and death provisions of Cal. Fam. Code sec. 4337
should be interpreted “in a similar fashion.” Johanson v.
Commissioner, supra at 977 n.1. Applying this reasoning, we
conclude that petitioner’s liability to pay his former spouse’s
attorney’s fees of $4,000 would survive her death.
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Accordingly, petitioner’s payment of attorney’s fees to his
former spouse was not a payment of alimony within the meaning of
section 71(b)(1). See Stedman v. Commissioner, T.C. Memo. 2008-
239; Ribera v. Commissioner, T.C. Memo. 1997-38, affd. without
published opinion 139 F.3d 907 (9th Cir. 1998). As a result,
petitioner’s deduction of the disputed $3,400 is denied.
To reflect the foregoing,
Decision will be entered
under Rule 155.