                  T.C. Summary Opinion 2003-122



                     UNITED STATES TAX COURT



             MICHAEL ROBERT PETERSON, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 12783-02S.              Filed September 2, 2003.


     Michael Robert Peterson, pro se.

     James Brian Urie, for respondent.



     PANUTHOS, Chief Special Trial Judge:    This case was heard

pursuant to the provisions of section 7463 of the Internal

Revenue Code in effect at the time the petition was filed.

Unless otherwise indicated, section references are to the

Internal Revenue Code in effect for the year in issue.    The

decision to be entered is not reviewable by any other court, and

this opinion should not be cited as authority.
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     Respondent determined a deficiency in Federal income tax of

$6,373.56 for the 2000 taxable year.   The issue for decision is

whether unallocated support payments constitute “alimony or

separate maintenance payments” that petitioner may deduct under

section 215.

Background

     Some of the facts have been stipulated, and they are so

found.   The stipulation of facts and the attached exhibits are

incorporated herein by this reference.   At the time the petition

was filed, petitioner’s mailing address was Manville, New Jersey.

     At the time of trial, petitioner was employed as a police

officer.   Petitioner and Dawn M. Peterson (Ms. Peterson) were

married prior to the year in issue.    They had two minor children:

Marc and Christopher.   In November 1999, petitioner filed for

divorce in the Superior Court of New Jersey, Chancery

Division/Family Part, Hunterdon County (New Jersey court).

     The New Jersey court issued and filed on January 27, 2000,

an Order for Pendente Lite Relief (pendente lite order), which

provided in part:

          1. Legal custody of the two minor children of the
     marriage, Marc and Christopher, shall be shared
     jointly. Residential custody of Christopher shall be
     with plaintiff father. Residential custody of Marc
     shall be with defendant mother.

          2. Each child shall alternate weekends with the
     other parent from 7:00 p.m. Friday until 7:00 p.m.
     Sunday, so that both children are together every
     weekend. Furthermore, they shall alternate Wednesday
                                - 3 -

     evening parenting time from 6:00 p.m. until 9:00 p.m.,
     again so the children are together every Wednesday
     evening.

                  *    *    *    *      *   *   *

          9. Defendant is hereby granted pendente lite,
     unallocated support in the amount of $325 per week,
     retroactive to December 23, 1999. Payments shall be
     made through income withholding through the Hunterdon
     County Probation Department. Plaintiff shall pay all
     arrears and the weekly obligation beginning immediately
     and keep the account current until he sees the correct
     amount being withheld from his paycheck.

     The pendente lite order was later modified on February 2,

2000, “so that the award of unallocated support of $325 per week

is retroactive to December 14, 1999, the filing date of

defendant’s cross-motion for support.”

     Petitioner’s divorce became effective May 21, 2001.

     On April 15, 2001, petitioner filed a Form 1040, U.S.

Individual Income Tax Return, for the 2000 taxable year (2000 tax

return).   Petitioner claimed a deduction of $24,424 as alimony

paid.1

     Respondent issued petitioner a notice of deficiency dated

May 15, 2002, determining a deficiency in Federal income tax of


     1
        Although the pendente lite order granted Ms. Peterson
unallocated support of $325 per week for the 2000 taxable year,
petitioner claimed a deduction of $24,424 for alimony paid.
Respondent does not contend that the claimed amount has not been
paid; rather, respondent’s only basis for disallowing the
deduction is his contention that unallocated support payments do
not constitute alimony or separate maintenance payments under
sec. 215. The record also does not indicate whether Ms. Peterson
included any portion of this amount as gross income under secs.
61(a)(8) and 71(a).
                               - 4 -

$6,373.56 for the 2000 taxable year.   Respondent disallowed the

deduction of $24,424 as alimony payments.2

     Petitioner contends that the unallocated support payments

made pursuant to the pendente lite order constitute “alimony or

separate maintenance [payments]” under section 71(b), because,

under New Jersey law, the hypothetical death of Ms. Peterson

would relieve him of any further obligation to make the

unallocated support payments when he has joint custody of his two

minor children.   Respondent disagrees that the death of Ms.

Peterson would result in such relief, citing Gonzales v.

Commissioner, T.C. Memo. 1999-332.3

Discussion

     Petitioner filed his 2000 tax return on April 15, 2001,

accordingly section 7491(a) is applicable in the instant case.

However, neither party takes a position as to whether the burden

of proof has shifted to respondent under section 7491(a).   We

conclude that resolution of the issue whether unallocated support

payments constitute alimony or separate maintenance payments does

not depend upon who has the burden of proof.


     2
        The notice of deficiency also contains an adjustment of
$717 to the amount of itemized deductions claimed by petitioner
in his 2000 tax return. This adjustment, which is computational
in nature, stems from respondent’s disallowance of petitioner’s
claimed deduction for alimony paid.
     3
        Neither party cited Kean v. Commissioner, T.C. Memo.
2003-163. We note that Kean was decided on June 4, 2003, after
this case was submitted.
                               - 5 -

     Payments to support children generally are not deductible.

Sec. 71(c).   However, alimony or separate maintenance payments

generally are deductible by the payor spouse.   Sec. 215.   Alimony

or separate maintenance payments are defined by section 71(b),

which 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 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.

     In the present case, the parties focus on whether the

requirements of section 71(b)(1)(D) have been satisfied.    These

requirements are satisfied if petitioner had “no liability to

make any such payment for any period after the death of the payee
                               - 6 -

spouse [Ms. Peterson] and there [was] no liability to make any

payment (in cash or property) as a substitute for such payments

after the death of the payee spouse.”    Id.   If petitioner were

obligated to continue making unallocated support payments under

the pendente lite order after the hypothetical death of Ms.

Peterson, then such payments would be nondeductible child support

payments instead of deductible alimony or separate maintenance

payments.   “Whether such obligation exists may be determined by

the terms of the applicable instrument, or if the instrument is

silent on the matter, by looking to State law.”     Kean v.

Commissioner, T.C. Memo. 2003-163.

     The pendente lite order issued by the New Jersey court did

not indicate whether the unallocated support payments would

terminate upon Ms. Peterson’s death.    Hence, we turn to New

Jersey law to ascertain whether it would imply a postdeath legal

obligation.

     New Jersey has a support statute authorizing courts to award

alimony or child support, either pending the divorce suit or

after final judgment.   This statute provides in relevant part:

          Pending any matrimonial action brought in this
     State * * * the court may make such order as to the
     alimony or maintenance of the parties, and also as to
     the care, custody, education and maintenance of the
     children * * *. * * * Orders so made may be revised and
     altered by the court from time to time as circumstances
     may require. [N.J. Stat. Ann. sec. 2A:34-23 (West
     2003); emphasis added.]
                               - 7 -

A court order regarding unallocated support payments is

modifiable.   Farmilette v. Farmilette, 566 A.2d 835 (N.J. Super.

Ct. Ch. Div. 1989).   Moreover, the obligation to pay alimony ends

at the recipient’s death, and upon such event, a court order

regarding alimony is modifiable.   See N.J. Stat. Ann. sec. 2A:34-

23 (West 2003); Jacobsen v. Jacobsen, 370 A.2d 65, 66 (N.J.

Super. Ct. Ch. Div. 1976).

     In general, divorce proceedings abate with the death of one

of the parties.   Carr v. Carr, 576 A.2d 872, 875 (N.J. 1990).

Issues of custody and support of children do not abate, however.

Jacobsen v. Jacobsen, supra at 66.     Regarding the death of the

custodial parent, New Jersey statutory law provides:

          In case of the death of the parent to whom the
     care and custody of the minor children shall have been
     awarded by the Superior Court, or in the case of the
     death of the parent in whose custody the children
     actually are, when the parents have been living
     separate and no award as to the custody of such
     children has been made, the care and custody of such
     minor children shall not revert to the surviving parent
     without an order or judgment of the Superior Court to
     that effect. * * * [N.J. Stat. Ann. sec. 9:2-5 (West
     2003).]

It “implicitly recognizes the inherent right of the non-custodial

parent to the reversion to his or her custody of the children

born of the marriage upon the custodial parent’s death and the

satisfaction of the statutory conditions.”     In re D.T., 491 A.2d

7, 9 n.3 (N.J. Super. Ct. App. Div. 1985) (referring to N.J.

Stat. Ann. sec. 9:2-5 (West 2003)).
                                 - 8 -

     In Gonzales v. Commissioner, T.C. Memo. 1999-332, we held

that the requirement of section 71(b)(1)(D) had not been met and,

therefore, the unallocated support payments were not alimony or

separate maintenance payments.    In so holding, we noted that New

Jersey statutes did not say whether unallocated support payments

terminated on the death of the payee spouse.   We nonetheless

noted that a New Jersey court order regarding unallocated support

payments is modifiable and that, under the particular facts of

Gonzales, the death of the payee spouse would not have

necessarily relieved the noncustodial payor spouse of his

obligation to make unallocated support payments.   We posited that

a court might have reduced the noncustodial payor spouse’s

payments rather than terminate them altogether.

     Contrasting Gonzales v. Commissioner, supra, is Kean v.

Commissioner, supra.    In the latter case, the Commissioner

argued, and we agreed, that the unallocated support payments made

pursuant to a New Jersey court order were alimony or separate

maintenance payments.   We noted, as a distinguishing factor, that

the payor spouse had joint custody during the period when the

unallocated support payments were made.   We further noted the

general rule that divorce proceedings terminate with the death of

either spouse.   As such, the payor spouse in Kean would have

received sole custody of the children if the payee spouse had

died during the pendency of the divorce proceeding, and there
                                - 9 -

would be no logical reason for a court to order the payor spouse

to continue making unallocated support payments.

     The present case is similar to Kean v. Commissioner, supra.

During the 2000 taxable year, petitioner had joint legal custody

of Marc and Christopher and residential custody of Christopher.

If Ms. Peterson had died during the pendency of the divorce

proceeding, such proceeding would have abated, while the issue of

residential custody of Marc would not have abated.     Petitioner

would then have had to seek a court order or judgment on this

issue, but absent unusual circumstances not present here, custody

would have reverted to petitioner.      Similar to Kean, there would

be no logical reason in the present case for the New Jersey court

to order that petitioner continue to make unallocated support

payments.

     We conclude that, under the particular facts of this case,

petitioner’s obligation to make unallocated support payments

during the pendency of the divorce proceedings would have

terminated at Ms. Peterson’s death, and as such, the requirements

of section 71(b)(1)(D) are satisfied.     We further conclude that

unallocated support payments made in the present case are alimony

or separate maintenance payments for Federal income tax purposes

and that such payments in the amount of $24,424 are deductible by

petitioner under section 215.
                            - 10 -

    Reviewed and adopted as the report of the Small Tax Case

Division.

    To reflect the foregoing,

                                        Decision will be entered

                                  for petitioner.
