                        T.C. Memo. 2008-239



                     UNITED STATES TAX COURT



                 JACK R. STEDMAN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10802-05.                 Filed October 27, 2008.



     Jack R. Stedman, pro se.

     Michael W. Bitner, for respondent.



                        MEMORANDUM OPINION


     THORNTON, Judge:   Respondent determined a $1,928 deficiency

in petitioner’s 2002 Federal income tax and a $386 accuracy-

related penalty under section 6662.1   The issues for decision



     1
       Unless otherwise indicated, all section references are to
the Internal Revenue Code as in effect for the taxable year at
issue.
                                - 2 -

are:    (1) Whether petitioner is entitled to deduct as alimony

court-ordered payments of attorney’s fees to his ex-wife; and (2)

whether petitioner is liable for the section 6662 accuracy-

related penalty.

                              Background

       The parties have stipulated some facts, which are so found.

When he petitioned the Court, petitioner resided in Nebraska.

       Petitioner is a retired postal inspector and certified

public accountant (C.P.A.).    In 1980 petitioner and Ivadelle L.

Stedman divorced.    There ensued protracted litigation between

them over her right to a portion of petitioner’s Civil Service

Retirement System (CSRS) benefits.

       By finding of facts and order on attorney’s fees dated June

28, 1995, pursuant to Cal. Fam. Code sec. 2030 (West 1994), the

Superior Court of California, County of Santa Clara, ordered

petitioner to pay his former wife’s attorney $112,075,

representing $102,000 in fees and $10,075 in costs.      By the

Superior Court’s amended order dated August 31, 1995, these

attorney’s fees and costs were to be paid in monthly installments

from petitioner’s CSRS benefits.    For the year at issue, the

monthly installments were $1,000 per month.      The U.S. Office of

Personnel Management (OPM) was ordered to make these payments

directly to petitioner’s former wife.      The order and amended

order were silent as to whether the obligation to pay attorney’s
                                - 3 -

fees and costs would terminate if she died before they were paid

in full.

     On his 2002 Federal income tax return, petitioner claimed a

$12,000 deduction for alimony paid with respect to the award of

attorney’s fees and costs.   Petitioner did not consult a tax

professional about this claimed deduction.   In the notice of

deficiency, respondent disallowed the deduction and imposed an

accuracy-related penalty pursuant to section 6662(a) and (b)(1).

                             Discussion

Alimony Deduction

     Section 215(a) allows a deduction for the payment of alimony

as defined in section 71(b), which provides:

          (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
                               - 4 -

          a substitute for such payments after the
          death of the payee spouse.

     The parties agree that the requirements of subparagraphs

(A), (B), and (C) have been satisfied.   They disagree solely

about whether the payments satisfy subparagraph (D); i.e.,

whether the obligation to pay the court-ordered attorney’s fees

and costs would have terminated in the event of the death of

petitioner’s former wife.

     Under section 71(b)(1)(D), the payor must have no liability

to continue payments after the recipient’s death; otherwise the

payor may not deduct any required related payments.    See Johanson

v. Commissioner, 541 F.3d 973, 976-977 (9th Cir. 2008), affg.

T.C. Memo. 2006-105; Kean v. Commissioner, 407 F.3d 186, 191 (3d

Cir. 2005), affg. T.C. Memo. 2003-163.   If the divorce instrument

is silent as to the existence of a postdeath obligation, the

requirements of section 71(b)(1)(D) may still be satisfied if the

payments terminate upon the payee spouse’s death by operation of

State law.   Johanson v. Commissioner, supra at 977.   If State law

is ambiguous in this regard, however, a “‘federal court will not

engage in complex, subjective inquiries under state law; rather,

the court will read the divorce instrument and make its own

determination based on the language of the document.’”    Id.

(quoting Hoover v. Commissioner, 102 F.3d 842, 846 (6th Cir.

1996), affg. T.C. Memo. 1995-183).
                               - 5 -

     Because the Superior Court order is silent as to whether the

obligation to pay attorney’s fees and costs to petitioner’s

former wife would terminate in the event of her death, we

consider whether California law provides a clear answer to this

question.

     Petitioner was ordered to pay his former wife’s attorney’s

fees and costs pursuant to Cal. Fam. Code sec. 2030.   That

provision authorizes a court in a marriage dissolution proceeding

to order one party to pay reasonably necessary attorney’s fees

and costs to the other party or to the other party’s attorney.

There is no provision in Cal. Fam. Code sec. 2030 terminating the

payor’s obligation upon the death or remarriage of the other

spouse.   By contrast, with respect to court-ordered awards of

spousal “support” made pursuant to Cal. Fam. Code sec. 4337 (West

2004), the statute specifically provides that, unless the parties

to a marriage dissolution agree otherwise in writing, the payor’s

obligation “terminates upon the death of either party or the

remarriage of the other party.”   Cal. Fam. Code sec. 4337.

     Differentiating attorney’s fees from spousal support, one

California court has held that under the statutory predecessor to

Cal. Fam. Code sec. 2030, the remarriage of a former spouse does

not preclude her right to attorney’s fees in a postdissolution

proceeding.   Newport v. Newport, 201 Cal. Rptr. 647, 648 (Ct.

App. 1984).   Respondent contends that since remarriage does not
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terminate the right to attorney’s fees, neither would the death

of a former spouse.   See Adamoli v. Drake, 62 Cal. Rptr. 2d 466

(Ct. App. 1997) (in a postdissolution proceeding involving a

former husband’s continuing obligation to support a disabled

child, the former wife’s cause of action for attorney’s fees

under Cal. Fam. Code sec. 2030 did not abate with her death); cf.

Johanson v. Commissioner, supra at 977 n.1 (following California

case law which holds that the death and remarriage provisions of

Cal. Fam. Code sec. 4337 should be interpreted “in a similar

fashion”).

     We find respondent’s contentions persuasive.   Indeed,

without expressly analyzing the particulars of California family

law, this Court has held that an award of attorney’s fees in a

California domestic relations proceeding survived the death of

the spouse to whom the fees were awarded.   Ribera v.

Commissioner, T.C. Memo. 1997-38, affd. without published opinion

139 F.3d 907 (9th Cir. 1998); see also Berry v. Commissioner,

T.C. Memo. 2000-373 (under Oklahoma law, obligation to pay

attorney’s fees arising from a temporary order issued by the

divorce court pendente lite would not have terminated if the

payee spouse died before entry of a final decree), affd. 36 Fed.

Appx. 400 (10th Cir. 2002); Zinsmeister v. Commissioner, T.C.

Memo. 2000-364 (under Minnesota law, payment of attorney’s fee

award did not qualify as alimony where the payor’s obligation to
                                - 7 -

pay survived the payee’s death), affd. 21 Fed. Appx. 529 (8th

Cir. 2001).    But even if we were to conclude that California law

were unclear or ambiguous in this regard, it would not avail

petitioner, for then we would be required to make an independent

determination on the basis of the Superior Court orders as to

whether petitioner’s attorney’s fee obligation would end at the

death of his former wife.    See Johanson v. Commissioner, supra at

977.    Because the Superior Court orders are silent in this

regard, and because there is no other evidence to support a

contrary conclusion, we would still conclude that petitioner’s

obligation to make the payments in issue would not terminate upon

the death of his former spouse.    Hence the payments do not

satisfy the requirements of section 71(b)(1)(D).

       At trial and on brief petitioner has attacked the State

judgment awarding attorney’s fees and costs to his former wife.

He contends that the State court exceeded its authority in

ordering OPM to pay attorney’s fees and costs from his CSRS

benefits.    There is no indication, however, that any State court

has overturned the judgments in question.    Principles of

collateral estoppel and full faith and credit counsel that we

respect them.    See Stark v. Commissioner, T.C. Memo. 2003-47;

Calhoun v. Commissioner, T.C. Memo. 1992-246, affd. without

published opinion 993 F.2d 1533 (2d Cir. 1993).
                                 - 8 -

Accuracy-Related Penalty

     Section 6662(a) imposes a 20-percent penalty on any portion

of an underpayment that is attributable to, among other things,

negligence or disregard of rules or regulations.     See sec.

6662(b)(1).   For this purpose, negligence includes any failure to

make a reasonable attempt to comply with the tax code; the term

“disregard” includes “careless, reckless, or intentional

disregard.”   Sec. 6662(c).

     We find that petitioner’s understatement, resulting from his

improper attempt to deduct as alimony the court-ordered payments

of attorney’s fees, is attributable to negligence and disregard

of rules and regulations.     Accordingly, respondent has carried

his burden of production under section 7491(c) with respect to

the accuracy-related penalty under section 6662(a).

     The accuracy-related penalty does not apply with respect to

any portion of the underpayment if it is shown that the taxpayer

had reasonable cause and acted in good faith.     Sec. 6664(c)(1).

Petitioner, a retired C.P.A., has offered no separate arguments

in this regard.   He professes to be familiar with the provisions

of the Internal Revenue Code.     He did not consult a professional

tax adviser in preparing his 2002 Federal income tax return.

Particularly in the light of his experience and professed

knowledge, we conclude that petitioner has not shown that he had
                                 - 9 -

reasonable cause or acted in good faith with respect to the

disallowed alimony deduction.

     To reflect the foregoing,


                                           Decision will be entered

                                      for respondent.
