Ayres v. Comm'r

T.C. Summary Opinion 2007-4
UNITED STATES TAX COURT
JOHNNY AYRES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 12569-05S. Filed January 8, 2007.
Johnny Ayres, pro se.
Susan S. Canavello, for respondent.
COUVILLION, Special Trial Judge: This case was heard
pursuant to section 7463 in effect when the petition was filed.1
The decision to be entered is not reviewable by any other court,
and this opinion should not be cited as authority.
1
Unless otherwise indicated, subsequent section references
are to the Internal Revenue Code in effect for the year at issue.
The facts are not in dispute, and the issue is a question of law;
therefore, with respect to the burden of proof, the Court need
not address the applicability of sec. 7491. Higbee v.
Commissioner, 116 T.C. 438 (2001).
- 2 -
Respondent determined a deficiency of $2,713 in petitioner’s
Federal income tax for 2002.
The sole issue for decision is whether payments of $9,200 by
petitioner to his former wife during 2002 constituted alimony
deductible under section 215(a). That issue is resolved by
whether the $9,200 payments satisfy the definition of “alimony or
separate maintenance payment” under section 71(b)(1)(D).
Some of the facts were stipulated. Those facts, with the
annexed exhibits, are so found and are incorporated herein by
reference. At the time the petition was filed, petitioner was a
legal resident of Houma, Louisiana.
Petitioner was married to Loredana Timmoneri, and they were
divorced on July 1, 2002, by a Louisiana State court. There were
no children born of the marriage. In the petition for divorce,
petitioner prayed that the community property regime between him
and his wife be terminated, and the property be divided between
them according to law. No allegation was made in the petition
for divorce as to alimony or spousal support, and the Judgment of
Divorce that was rendered on July 1, 2002, does not contain a
provision requiring payment of alimony by petitioner to his
former spouse. By an Act of Partition of Community Regime,
effective on April 11, 2002, petitioner and his spouse agreed to
a partition or division of their community property. The
document explicitly states: “In consideration of the transfer to
- 3 -
him as hereinafter set forth, Johnny does hereby promise to
deliver unto Loredana a payment of $350 per month for six months,
starting in September 2002, and ending in March, 2003”. The
document further identified a car and clothing that were
transferred to petitioner’s former wife and described other
properties that went to petitioner. The document also states:
“and in further consideration whereof Loredana does hereby waive
any rights that she may have to interim periodic support or final
periodic support”. The parties agree that, pursuant to the
agreement, petitioner made total payments of $9,200 to his former
spouse during the year at issue.2 There is no language in the
agreement that would have relieved petitioner of the obligation
of making the payments to his former spouse in the event of her
prior death. There were no other court orders or agreements
between petitioner and his former spouse. On his Federal income
2
The $9,200 claimed as alimony consists of 12 payments of
$350 each during the year 2002 totaling $4,200. In addition,
prior to 2002, when petitioner and his spouse separated,
petitioner issued a check payable to his wife in the amount of
$5,000. That check was held by petitioner’s sister-in-law with
the understanding that, if petitioner and his spouse did not
reconcile within 6 months, the check would be delivered to
petitioner’s spouse. Petitioner and his spouse did not
reconcile, and the 6-month period elapsed during 2002. The
sister-in-law delivered the $5,000 check to petitioner’s spouse,
who then cashed the check during the year at issue, 2002. Thus,
the $4,200 total monthly payments during 2002 and the $5,000
check that was cashed during 2002 account for the $9,200 claimed
by petitioner as alimony. There was no documentation with
respect to the $5,000 check; however, respondent’s position at
trial was that it did not constitute alimony. The Court agrees
with that position.
- 4 -
tax return for 2002, petitioner claimed a deduction of $9,200 for
alimony. In the notice of deficiency, respondent disallowed the
claimed $9,200 in alimony.
Petitioner testified at trial that his former spouse “wanted
spousal support” and “she wasn’t really entitled to any kind of
property. We had only been married for about a year, and the
only purchase we made during that time was a car, and I gave her
the car, but she wanted some support.” This testimony, however,
is not corroborated by the Act of Partition referred to above or
by an order of the court.
Section 71(a) provides generally that alimony payments are
included in the gross income of the payee spouse, and section
215(a) provides generally that alimony payments are deductible by
the payor spouse. Section 215(b) provides in pertinent part that
the term “alimony” means any alimony, as defined in section
71(b), which is includable in the gross income of the recipient
under section 71. Section 71(b) defines alimony as follows:
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
not includable in gross income under this section
- 5 -
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.
Petitioner’s deduction for alimony is allowable only if all
four criteria of section 71(b)(1) are met. Jaffe v.
Commissioner, T.C. Memo. 1999-196. Thus, for our purposes here,
if the divorce decree or the Act of Partition provides that the
payment by one spouse to the other spouse is not includable in
the gross income of the receiving spouse and is not allowable as
a deduction to the payer spouse, the payments do not constitute
deductible alimony. Sec. 71(b)(1)(B). Neither of these
documents contained such a provision.
Petitioner’s argument that his former wife wanted spousal
support, and his payments to her were a fulfillment of that
desire, does not change the character of the payments to
constitute the payments as alimony. In Richardson v.
Commissioner, 125 F.3d 551, 556 (7th Cir. 1997), affg. T.C. Memo.
1995-554, the Court of Appeals for the Seventh Circuit stated:
“For a legal instrument to make known directly that a spouse’s
- 6 -
payments are not to be treated as income, we believe that the
instrument must contain a clear, explicit and express direction
to that effect.” If petitioner’s contention is correct, it
clearly was not contained in the Act of Partition agreement with
his former spouse. The Court, therefore, sustains respondent.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.