                     T.C. Summary Opinion 2007-190



                        UNITED STATES TAX COURT



              WILLIAM FRANKLIN SALZMAN II, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 2409-07S.               Filed November 7, 2007.



        William Franklin Salzman II, pro se.

        Bruce M. Wilpon, for respondent.


     DAWSON, 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
      Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for the
year in issue.
                                 - 2 -

     Respondent determined a deficiency of $1,500 in petitioner’s

Federal income tax for 2004.   At issue is whether support

payments petitioner made to his former wife in 2004 constitute

alimony as defined by section 71(b) and are thus deductible by

him under section 215(a).

                            Background

     All of the facts have been stipulated and are so found.    The

stipulation of facts and the attached exhibits are incorporated

herein by this reference.   When the petition was filed,

petitioner resided in San Antonio, Texas.

     Petitioner was previously married to Beverly Salzman (his

former wife).   Their marriage was dissolved through proceedings

in the District Court of Bexar County, Texas.    An Agreed Final

Decree of Divorce (divorce decree) was approved and entered by

that court on October 4, 2002.    It included a contractual

agreement between petitioner and his former wife, both having

been represented by counsel, as to spousal support and property

division.   Under the heading “Spousal Support”, the divorce

decree provides in pertinent part:

     It is ordered that William Franklin Salzman, II, is
     obligated to pay and shall pay to Beverly June Salzman
     spousal maintenance of $500.00 per month for a period
     of no longer than four (4) years, with the first
     payment of $250.00 being due and payable on June 1,
     2002, and a second payment of $250.00 being due and
     payable on June 15, 2002, and thereafter a like payment
     of $500.00 being due and payable on the first day of
     each month for a period of no longer than four years.
                                 - 3 -

Neither the agreement nor the divorce decree specifies whether

petitioner’s obligation to make such payments would terminate

upon his former wife’s death.

     In 2004 petitioner made “spousal support” payments totaling

$6,000 to his former wife for which he claimed an alimony

deduction on his Federal income tax return for that year.

Respondent disallowed the claimed alimony deduction in the notice

of deficiency.

                           Discussion2

     Petitioner contends that because he always made timely

support payments to his former wife in compliance with his

agreement and the district court’s judgment, he is entitled to

his claimed alimony deduction.    To the contrary, respondent

contends that petitioner’s payments do not qualify as alimony

under the Internal Revenue Code.

     Section 71(a) provides the general rule that alimony

payments are included in the gross income of the payee spouse.

Section 215(a) provides the complementary general rule that

alimony payments are deductible by the payor spouse in “an amount

equal to the alimony or separate maintenance payments paid during

such individual’s taxable year.”




     2
      The issue for decision is essentially legal.   Therefore, we
decide it without regard to the burden of proof.
                               - 4 -

      The term “alimony” means any alimony as defined in section

71.   Section 71(b) provides in part:

           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 * * * 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.

      The parties agree that petitioner’s payments to his former

wife satisfied the requirements set out in section 71(b)(1)(A),

(B), and (C).   Their disagreement is solely about whether

petitioner’s payments satisfied the provisions of section

71(b)(1)(D); i.e., whether his liability to make payments would
                                - 5 -

have terminated in the event of his former wife’s death.     If so,

the payments would have been “alimony”.   Because we think

petitioner’s payments would not have terminated upon her death,

we agree with respondent that they are not alimony, for the

reasons stated below.

     Under section 71(b)(1)(D), if the payor is liable for any

qualifying payment after the recipient’s death, none of the

related payments required will be deductible as alimony by the

payor.   See Kean v. Commissioner, 407 F.3d 186, 191 (3d Cir.

2005), affg. T.C. Memo. 2003-163.   Whether a postdeath obligation

exists may be determined by the terms of the divorce or

separation instrument or, if the instrument is silent on the

matter, by State law.    Morgan v. Commissioner, 309 U.S. 78, 80-81

(1940); see also Kean v. Commissioner, supra at 191.    The parties

dispute whether the payments at issue meet the requirements of

section 71(b)(1)(D).    They agree that the agreement and divorce

decree do not provide any conditions for the termination of the

payments.   Respondent maintains that the payments made by

petitioner to his former wife are not deductible from his income

as alimony under section 215(a) because the obligation to make

the payments does not terminate at the death of either party

under Texas law.   Petitioner argues that the payments are

deductible because he intended them to be alimony and because the

agreement reached with his former wife did not specifically state
                                - 6 -

that the payments do not terminate upon the death of either of

them.

       Although section 71(b)(1)(D), as it was enacted in 1984,

originally required that a divorce or separation instrument

affirmatively state that liability for payments terminates upon

the death of the payee spouse in order to be considered alimony,

the statute was retroactively amended in 1986 so that such

payments now qualify as alimony as long as termination of the

liability would occur upon the death of the payee spouse by

operation of State law.    Hoover v. Commissioner, 102 F.3d 842,

845-846 (6th Cir. 1996), affg. T.C. Memo. 1995-183.    Petitioner’s

agreement and the divorce decree are silent on whether his

monthly payments of $500 to his former wife, totaling $24,000 for

the fixed 4-year period, would survive her death as a matter of

law.    Consequently, our analysis is guided by Texas State law.

       Section 7.006 of the Texas Family Code provides for written

agreements incident to divorce:

            (a) To promote amicable settlement of disputes in a
       suit for divorce or annulment, the spouses may enter into a
       written agreement concerning the division of the property
       and the liabilities of the spouses and maintenance of either
       spouse. The agreement may be revised or repudiated before
       rendition of the divorce or annulment unless the agreement
       is binding under another rule of law.

Tex. Fam. Code Ann. sec. 7006(a) (Vernon 2006).

       Under Texas State law contractual support payments do not

terminate on the death of the former payee spouse absent
                                 - 7 -

agreement to the contrary shown by the contract or surrounding

circumstances.   In Cardwell v. Sicola-Cardwell, 978 S.W.2d 722,

726 (Tex. App. 1998), the State court of appeals, holding that

contractual alimony agreements in Texas are governed by the law

of contracts, and generally survive the death of one of the

parties, stated:

     Neither the historical treatment of alimony in Texas, nor
     Texas case law, indicates that the general rules of
     alimony--i.e., court-ordered spousal support--should
     apply to contracts for spousal support, particularly
     the rule that alimony presumptively terminates on the
     obligor’s death. Cf. Hutchings, 406 S.W.2d at 421
     (holding that agreement for periodic child support
     payments is governed by law of contracts, and under
     contract principles payments survive obligor’s death
     absent agreement to contrary shown by provisions of
     contract or surrounding circumstances).

     While petitioner’s assertions are forthright and appealing,

unfortunately for him the Internal Revenue Code is specific in

its requirements, and by virtue of Texas State law his support

payments to his former wife in 2004 did not meet the requirement

outlined in section 71(b)(1)(D).    Accordingly, we hold that

petitioner’s payments made to his wife in 2004 did not satisfy

all the conditions set forth in section 71 and thus are not

properly deductible as alimony for the taxable year in issue.

     To reflect the foregoing,

                                         Decision will be entered

                                 for respondent.
