T.C. Memo. 2011-265
UNITED STATES TAX COURT
JAMES F. MOORE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent*
Docket No. 23193-09. Filed November 8, 2011.
Keith Wolak, for petitioner.
K. Elizabeth Kelly and Mayer Y. Silber, for respondent.
SUPPLEMENTAL MEMORANDUM OPINION
VASQUEZ, Judge: On September 8, 2011, pursuant to Rule
161,1 petitioner timely filed a motion for reconsideration of
*
This opinion supplements our prior opinion, Moore v.
Commissioner, T.C. Memo. 2011-200.
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
(continued...)
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this Court’s Memorandum Findings of Fact and Opinion in Moore v.
Commissioner, T.C. Memo. 2011-200 (Moore I). In Moore I we held
that petitioner was not entitled to deduct payments that he made
to his former spouse during 2006 as alimony under section 215(a).
Background
We adopt the findings of fact in our prior Memorandum
Findings of Fact and Opinion, Moore I. For convenience and
clarity, we repeat below the facts necessary for the disposition
of this motion.
In 2006 petitioner made payments to his former spouse of
$21,700.82 and deducted these amounts as alimony on his Form
1040, U.S. Individual Income Tax Return, for 2006. Respondent
subsequently determined that petitioner’s payments were not
deductible as alimony. The divorce decree is silent as to
whether petitioner’s maintenance obligation to his former spouse
terminates on her death.
Discussion
Reconsideration under Rule 161 is intended to correct
substantial errors of fact or law and allow the introduction of
newly discovered evidence that the moving party could not have
introduced, by the exercise of due diligence, in the prior
proceeding. Estate of Quick v. Commissioner, 110 T.C. 440, 441
1
(...continued)
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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(1998). This Court has discretion to grant a motion for
reconsideration and will not do so unless the moving party shows
unusual circumstances or substantial error. Id.; see also Vaughn
v. Commissioner, 87 T.C. 164, 166-167 (1986). “Reconsideration
is not the appropriate forum for rehashing previously rejected
legal arguments or tendering new legal theories to reach the end
result desired by the moving party.” Estate of Quick v.
Commissioner, supra at 441-442.
In Moore I we concluded that petitioner was not entitled to
deduct payments he made to his former wife as alimony under
section 215. Section 215(a) permits a deduction for the payment
of alimony during a taxable year. Section 215(b) defines
“alimony” as alimony which is includable in the gross income of
the recipient under section 71. Section 71(b)(1) defines alimony
as any cash payment meeting the four criteria provided in
subparagraphs (A) through (D) of that section.2 Accordingly, if
2
Sec. 71(b)(1) provides:
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
(continued...)
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any portion of the payments petitioner made fails to meet any one
of the four enumerated criteria, that portion is not alimony for
purposes of section 71(b)(1) and petitioner cannot deduct it.
Respondent agreed that the requirements of subparagraphs (A)
and (C) had been satisfied. He argued, however, that
petitioner’s payments to his former wife did not satisfy
subparagraphs (B) and (D). We agreed with respondent that the
payments did not satisfy the requirements of section 71(b)(1)(D).
We also noted that “[b]ecause petitioner fails to show that the
payments comply with subpar. (D), we need not determine whether
they satisfied subpar. (B).”
Petitioner argues that we should grant his motion for
reconsideration because (1) this Court, when deciding whether
alimony payments automatically terminate upon the death of the
payee spouse under Indiana law, overlooked Deel v. Deel, 909
2
(...continued)
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
payment (in cash or property) as a substitute for
such payments after the death of the payee spouse.
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N.E.2d 1028 (Ind. Ct. App. 2009) and (2) we failed to address
whether petitioner satisfied his evidentiary obligation with
respect to section 71(b)(1)(B). In response, respondent contends
that petitioner’s allegations of error are not based on new
evidence and merely restate arguments petitioner made in Moore I.
In deciding whether petitioner’s maintenance obligation
would terminate upon the death of his former spouse, the Court
considered Deel and determined that it did not warrant
discussion. Petitioner cited Deel for the proposition that under
Indiana law, unless the terms of the divorce decree specify that
the payments survive the death of the payee spouse, maintenance
payments automatically terminate on the death of the payee
spouse. After reviewing Deel we determined that it did not stand
for the proposition for which petitioner cited it.
In Deel, the Indiana Court of Appeals decided whether the
payments Mr. Deel made to his former wife were maintenance
payments or part of a property settlement, not whether under
Indiana law a maintenance obligation terminates on the death of
the payee spouse. Deel v. Deel, supra at 1031. After concluding
the divorcee decree was ambiguous, the court of appeals stated:
To resolve the ambiguity, we consider various factors
to determine whether the clause is one for maintenance or
part of a property settlement. Mackey v. Estate of Mackey,
858 N.E.2d 1038, 1043 (Ind. Ct. App. 2006) (citing In re
Marriage of Buntin, 496 N.E.2d 1351, 1353-54 (Ind. Ct.
App. 1986)). The factors indicating that a payment was
maintenance are: (1) the designation as maintenance; (2)
provision terminating the payments upon death of either
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party; (3) payments made from future income; (4) provisions
for termination upon remarriage; (5) provisions calling for
the modification based upon future events; (6) and payments
for an indefinite period of time. Id. On the other hand,
property settlements are indicated when: (1) the payments
are for a sum certain payable over a definite period of
time; (2) there are no provisions for modification based on
future events; (3) the obligation to make payments survives
the death of the parties; (4) the provisions call for
interest; and (5) the award does not exceed the value of the
marital assets at the time of dissolution. Id.; see also
* * * [Brinkmann v. Brinkmann, 772 N.E.2d 441, 445 (Ind. Ct.
App. 2002)].
Id. at 1034.
The court of appeals concluded that for a number of reasons,
the payments constituted spousal maintenance. Id. In evaluating
the factors the court of appeals stated that “the sum and
duration of the payments were uncertain because the decree does
not include an obligation for Husband to continue payments if
Wife died prior to attaining the age of sixty-five.”3 Id. at
1035. This is the statement on which petitioner relies. The
court of appeals did not explain why it concluded the payments
terminate on the payee’s death. It is unclear whether this
determination was based on the facts of the case, and the court
of appeals did not cite any Indiana law for support.
Furthermore, the Court of Appeals stated that it was resolving
the ambiguity against the wife because her attorney drafted the
divorce decree. Id. (citing Time Warner Entmt. Co. v. Whiteman,
3
The divorce decree provided that the payments terminated
when wife reached 65.
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802 N.E.2d 886, 894 (Ind. 2004) (“We construe any contract
ambiguity against the party who drafted it.”)). We do not read
Deel as expressly stating that Indiana law inserts into all
Indiana divorce decrees a default provision that automatically
terminates maintenance obligations upon the death of the payee
spouse. Petitioner did not cite an opinion or statute, and we
have found none, that expressly states that, absent a provision
in the divorce decree to the contrary, by operation of Indiana
law maintenance payments automatically terminate on the death of
the payee spouse.
In addition, petitioner questions our decision to not
discuss whether he satisfied his evidentiary obligation with
respect to section 71(b)(1)(B). The four requirements of section
71(b)(1) are conjunctive; a payment is deductible as alimony only
if all four requirements of section 71(b)(1) are met. Johnson v.
Commissioner, T.C. Memo. 2006-116. Because the payments
petitioner made to his former spouse do not meet the requirements
of section 71(b)(1)(D), the question of whether the payments meet
the requirements of section 71(b)(1)(B) did not need to be
decided.
Petitioner has failed to demonstrate unusual circumstances
or substantial errors of fact or law. Accordingly, we will deny
petitioner’s motion for reconsideration.
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To reflect the foregoing,
An appropriate order
will be issued.