                  T.C. Memo. 1998-27



                UNITED STATES TAX COURT


           NORMAN D. PETERSON, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent

           MARTA E. PETERSON, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket Nos. 12074-96, 17347-96.        Filed January 22, 1998.



     H's case was consolidated for trial, briefing, and
opinion with that of W, H's former spouse. During
taxable year 1992, H made support payments totaling
$63,170 to W pursuant to a State court Minute Order and
attached Tentative Decision and prior to the entry of a
judgment of dissolution of marriage. H deducted these
payments on his return for that year as alimony
pursuant to sec. 215(a), I.R.C. W did not include
these payments as alimony income on her return for
1992. To avoid whipsaw, R took inconsistent positions
against H and W in notices of deficiency issued to
them, disallowing H's sec. 215(a), I.R.C., deduction of
$63,170 and adjusting W's income to reflect the receipt
of that amount as alimony pursuant to secs. 61(a)(8)
and 71(a), I.R.C. On brief, R took a position in
support of H and adverse to W. Held: The payments at
issue constitute alimony within the meaning of section
                                  - 2 -

       71, I.R.C., and are therefore deductible by H and
       includable in the gross income of W for taxable year
       1992. Secs. 61(a)(8), 71(a), and 215(a), I.R.C.



       W. James Slaughter, for petitioner Norman D. Peterson.

       Randall R. Wittman, for petitioner Marta E. Peterson.

       Linas N. Udrys, for respondent.



                            MEMORANDUM OPINION

       NIMS, Judge:   In these consolidated cases, respondent

determined the following deficiencies and accuracy-related

penalty with respect to the Federal income taxes of petitioners

Norman D. Peterson (Norman) and Marta E. Peterson (Marta):

                           Docket No. 12074-96
                           (Norman D. Peterson)

Year             Deficiency

1992             $15,161

                           Docket No. 17347-96
                           (Marta E. Peterson)

                                            Penalty
Year             Deficiency               Sec. 6662(a)

1992             $16,030                  $3,206


       All section references are to sections of the Internal

Revenue Code in effect for the year in issue, unless otherwise

indicated.    All Rule references are to the Tax Court Rules of

Practice and Procedure.
                                - 3 -

     After a concession by respondent, the sole issue for

decision is whether spousal support payments made in accordance

with a Minute Order and attached Tentative Decision and prior to

an entry of judgment of dissolution of marriage in taxable year

1992 constitute alimony within the meaning of section 71(b) so as

to be deductible by Norman pursuant to section 215(a) and

includable in the gross income of Marta pursuant to sections

61(a)(8) and 71(a) for that year.

     This case was submitted with fully stipulated facts under

Rule 122.   The stipulation of facts and the attached exhibits are

incorporated herein by this reference.     Norman resided in Laguna

Hills, California, when he filed his petition.    Marta resided in

Laguna Beach, California, when she filed her petition.

                              Background

     Norman and Marta are former spouses.    Norman worked as a

physician during taxable year 1992; Marta was a homemaker.

Petitioners resided in separate households throughout 1992.

     Petitioners were separated on September 18, 1989.    On

November 5, 1991, a trial, lasting approximately 5 days, was held

before the Orange County Superior Court (Superior Court) in

California on the contested issues in the petitioners' divorce

case, which included the division of marital property, spousal

support, and child support.

     On January 6, 1992, the Superior Court issued a Minute Order

which stated "No appearances.    The Court, having taken matter
                                - 4 -

under submission on 11-5-91, now rules pursuant to Tentative

Decision signed and filed this date."       The Tentative Decision of

the Superior Court attached to, and incorporated in, the Minute

Order states in pertinent part that

          Child support is ordered in the amount of
     $12,366.00 per month total.

          Spousal support is ordered in the amount of
     $12,634.00 per month total.

          Total support is $25,000 per month, payable one-
     half on the first and one-half on the 15th of each
     month, commencing January 15, 1992. There shall be no
     termination date as to spousal support at this time.

               *      *    *    *       *    *    *

          The petitioner [Marta] is ordered to prepare the
     Judgment.

     A Judgment of Dissolution of Marriage (Judgment) was entered

on June 9, 1992.    The Judgment terminated petitioners' marriage

and restored petitioners to the status of unmarried persons as of

November 5, 1991.   Paragraph 24 of the Judgment provides:

     As and for spousal support, respondent [Norman] shall
     pay to petitioner [Marta] the sum of $12,634.00 per
     month, payable one-half on the first and one-half on
     the fifteenth of each month, commencing January 15,
     1992 and continuing thereafter each month until the
     death of either party, petitioner's remarriage or
     further order of court, whichever event shall first
     occur.

Other than the Minute Order, Tentative Decision, and the

Judgment, there were no other orders or agreements requiring the

payment of spousal support by Norman.
                                 - 5 -

     Prior to the entry of the Judgment, Marta received $63,170

(10 bimonthly payments of $6,317) from Norman in compliance with

the terms of the Tentative Decision as incorporated into the

Minute Order.   In addition, Norman made a total of $82,121 in

bimonthly spousal support payments to Marta during the period

from June 9, 1992, through December 31, 1992.

     Norman timely filed a Form 1040, U.S. Individual Income Tax

Return, for taxable year 1992.    Norman claimed as a deduction on

Line 29, "Alimony paid", of his return the entire amount of

spousal support he remitted to Marta during that year--$145,291.

     Marta also timely filed a Form 1040 for 1992.    On her

return, Marta reported as income on Line 11, "Alimony received",

only that portion of spousal support that she received after the

entry of the Judgment--$82,121.

     In the role of a stakeholder, respondent issued separate

notices of deficiency to Norman and Marta on May 21, 1996,

addressing petitioners' inconsistent treatment of the support

payments made prior to the entry of the Judgment.    Among other

adjustments, in the notice issued to Norman, respondent

disallowed the deduction of $63,170 as alimony paid.    In the

Explanation attached to the notice of deficiency, respondent

stated that Norman had neither established that such amount was

alimony, nor that such amount was paid.

     In the notice of deficiency issued to Marta, among other

adjustments, respondent determined that the $63,170 of payments
                               - 6 -

received from Norman from January 6, to June 9, 1992, constituted

alimony and adjusted her income accordingly.   In the Explanation

attached to the notice, respondent stated that "Alimony or

separate maintenance payments you received are includible in

income."   In addition, respondent determined that Marta was

liable for the accuracy-related penalty for negligence for 1992

pursuant to section 6662(a).   Respondent has since conceded that

Marta is not liable for the accuracy-related penalty.

                            Discussion

     We must decide whether spousal support payments made by

Norman to Marta from January 6, to June 9, 1992, in the amount of

$63,170 are alimony within the meaning of section 71.    To protect

the fisc, respondent has taken inconsistent positions in the

notices of deficiency issued to petitioners.   On brief, however,

respondent supports Norman's position that the payments are

alimony, and thus deductible by him pursuant to section 215(a)

and includable in Marta's gross income pursuant to sections

61(a)(8) and 71(a).

     Marta argues for the first time on brief that her notice of

deficiency "does not set forth Respondent's specific basis" for

the inclusion of the $63,170 of support payments in income and,

therefore, the Court should, under Rule 142(a), shift the burden

of proof in docket No. 17347-96 to respondent.   Rule 34(b)(4)

states that a petition must contain "Clear and concise

assignments of each and every error which the petitioner alleges
                                - 7 -

to have been committed by the Commissioner in the determination

of the deficiency or liability."   Any issue not raised by

petitioner in the assignment of errors is deemed to be conceded.

Rule 34(b)(4); Jarvis v. Commissioner, 78 T.C. 646, 658 (1982);

Gordon v. Commissioner, 73 T.C. 736, 739 (1980).

     In the present case, no error has been alleged in Marta's

petition with respect to the adequacy of the explanation set

forth in the notice concerning the disputed adjustment.   Thus,

Marta is deemed to have conceded this issue.   Rule 34(b)(4).   In

any event, we find the explanation set forth in the notice to be

adequate.

     Section 215(a) allows as a deduction to the payor an amount

equal to the alimony or separate maintenance payments made during

the payor's taxable year.   Conversely, sections 61(a)(8) and

71(a) provide that gross income includes amounts received as

alimony or separate maintenance payments.   Whether a payment

constitutes alimony or separate maintenance within the meaning of

sections 61(a)(8), 71(a), and 215(b) is determined by reference

to section 71(b).

     Section 71(b) provides in pertinent part as follows:

     (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,
                               - 8 -

               (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 * * *. (Emphasis added.)

     For purposes relevant to the present dispute, the term

"divorce or separation instrument" underscored above means a

decree requiring a spouse to pay for the support or maintenance

of the other spouse.   Sec. 71(b)(2)(C).   Such a decree must be

enforceable at the time it is issued.    See Taylor v.

Commissioner, 55 T.C. 1134, 1139-1140 (1971); White v.

Commissioner, T.C. Memo. 1984-65.

     According to Marta, the spousal support payments made by

Norman between January 6, and June 9, 1992, do not constitute

alimony within the meaning of section 71(b)(1) because the Minute

Order incorporating the Tentative Decision was not an enforceable

divorce or separation instrument within the meaning of section

71(b)(2) at the time it was issued.    On the other hand, Norman

and respondent maintain that the Minute Order incorporating the

Tentative Decision suffices under section 71(b)(2)(C) as a

support decree, thereby permitting Norman to deduct the support

payments at issue on his 1992 tax return and requiring their
                                - 9 -

inclusion in Marta's income in that year.    For the reasons which

follow, we agree with the position espoused by both Norman and

respondent in their respective briefs.

      In determining the substantive content of local judicial

action under these circumstances, this Court looks to applicable

local law.   Taylor v. Commissioner, supra at 1138.   In that

connection, Marta points to section 664 of the California Code of

Civil Procedure (West 1987), which provides that "In no case is a

judgment effectual for any purpose until entered."    Marta also

relies on rule 232, California Court Rules (West 1996), which

states that a tentative decision is not a judgment, and "shall

not be binding on the court."   Since the Judgment was not entered

until June 9, 1992, Marta maintains that nothing required Norman

to make the contested payments.

      Although we do not dispute the law that Marta has brought to

our attention, we do not think it dispositive of the issue before

us.   Section 577 of the California Code of Civil Procedure (West

1976) defines a judgment as the "final determination of the

rights of the parties in an action or proceeding."    However, a

judgment is not the only type of decree sufficient for purposes

of section 71(b)(2)(C).   A decree for support under section

71(b)(2)(C) includes "any type of court order or decree,

including an interlocutory decree of divorce or a decree of

alimony pendente lite", requiring one spouse to make payments for

the other spouse's support or maintenance.   Sec. 1.71-1(b)(3),
                             - 10 -

Income Tax Regs. (emphasis added); see sec. 1.71-1T(a), Q&A-4,

Temporary Income Tax Regs., 49 Fed. Reg. 34455 (Aug. 31, 1984);

see also Landreth v. Commissioner, T.C. Memo. 1997-169; Ambrose

v. Commissioner, T.C. Memo. 1996-128.    Thus, the proper inquiry

is not whether a final determination of the rights of the parties

had been made in the action for divorce at the time of the Minute

Order's issuance, but whether the Minute Order and attached

Tentative Decision constitutes an enforceable order under

California law requiring Norman to make support payments to

Marta.

     Section 1003 of the California Code of Civil Procedure (West

1980) defines an order as follows:    "Every direction of a court

or judge, made or entered in writing, and not included in a

judgment, is denominated an order."   A minute order is a "written

order of the court, and no formal writing signed by the court and

filed with the clerk is necessary" for it to be effective.

Simmons v. Superior Court, 341 P.2d 13, 17 (Cal. 1959).

     In the instant case, upon examination of the language of the

Minute Order and attached Tentative Decision, it is evident that

it is a direction of the court within the meaning of section 1003

of the California Code of Civil Procedure (West 1980).    The

Minute Order unequivocally directs Norman to pay Marta spousal

support in a certain amount commencing January 15, 1992, as set

forth in the attached Tentative Decision; the language is not, as

Marta would have it, merely precatory.   See Whitney v. Whitney,
                                - 11 -

330 P.2d 947, 952 (Cal. Dist. Ct. App. 1958) (holding that a

trial court had the authority, pursuant to a minute order, to

direct payment of permanent alimony commencing at a date earlier

than the effective date of a decree of divorce).     As an order,

the Minute Order and attached Tentative Decision was binding on

the parties even though it was subject to modification or

termination by the court and did not constitute a judgment.     See

City of Los Angeles v. Oliver, 283 P. 298, 309 (Cal. Dist. Ct.

App. 1929).

     Section 1007 of the California Code of Civil Procedure (West

1980) provides that "Whenever an order for the payment of a sum

of money is made by a Court, pursuant to the provisions of this

Code, it may be enforced by execution in the same manner as if it

were a judgment."     (Emphasis added.)   In Shields v. Shields, 130

P.2d 982, 983 (Cal. Dist. Ct. App. 1942), the court held that

this section applies to orders for the payment of alimony.     See

also Mathews v. Mathews, 193 P. 586, 587 (Cal. Dist. Ct. App.

1920) (holding that a provision in an interlocutory judgment of

divorce for the payment of certain alimony, though subject to

modification, need not be expressly carried into the final decree

to be enforceable).

     Based on the above discussion, we hold that the Minute Order

and Tentative Decision constitutes a valid support decree for

purposes of section 71(b)(2)(C), and therefore qualifies as a
                              - 12 -

"divorce or separation instrument" within the meaning of section

71(b).

     In her petition, Marta further alleged that, under the

Minute Order incorporating the Tentative Decision, Norman would

continue to be liable for spousal support payments after Marta's

death, and therefore such payments fall outside the scope of the

definition of alimony.   Sec. 71(b)(1)(D).   Marta based this

allegation on the language of the Tentative Decision, which

states that "There shall be no termination date as to spousal

support at this time."   However, Marta did not argue this point

on brief, and indeed makes no mention of it whatsoever.    It is,

therefore, appropriate that the argument be deemed abandoned.

See Rybak v. Commissioner, 91 T.C. 524, 566 n.19 (1988);

Carlstedt v. Commissioner, T.C. Memo. 1997-331.

     We have considered each of the parties' remaining arguments,

and to the extent that they are not discussed herein, find them

to be either insignificant or without merit.

     Based on the above, we hold that payments made by Norman to

Marta in the amount of $63,170 from January 6, 1992, to June 9,

1992, are alimony or separate maintenance within the meaning of

section 71.   As such, respondent correctly determined that they

are includable in Marta's gross income pursuant to sections

61(a)(8) and 71(a).   Respondent erred, however, in disallowing

Norman a deduction under section 215(a) for these payments.

     To reflect the foregoing and the concession by respondent,
- 13 -

     Decision will be

entered for petitioner in

docket No. 12074-96.

Decision will be entered

under Rule 155 in docket

No. 17347-96.
