                                T.C. Memo. 2020-39



                         UNITED STATES TAX COURT



               TIMOTHY CLINTON BIDDLE, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 4118-18.                           Filed April 6, 2020.



      Timothy Clinton Biddle, pro se.

      Liat Devere and Brock E. Whalen, for respondent.



            MEMORANDUM FINDINGS OF FACT AND OPINION


      VASQUEZ, Judge: Respondent determined a deficiency of $8,437 in

petitioner’s 2015 Federal income tax and a section 6662(a)1 accuracy-related



      1
         All section references are to the Internal Revenue Code (Code) in effect
for the year at issue, and all Rule references are to the Tax Court Rules of Practice
and Procedure.
                                        -2-

[*2] penalty of $1,687.40. After concessions,2 the issue for decision is whether

petitioner’s payments to his former spouse, in accordance with a divorce decree,

were deductible alimony payments under section 215.

                               FINDINGS OF FACT

      Some of the facts have been stipulated and are so found. We incorporate

the first stipulation of facts and accompanying exhibits by this reference.

Petitioner resided in El Paso, Texas, when he timely filed his petition.

Petitioner’s Background and Original Divorce Decree

      Petitioner and his former spouse were married for 14 years and had four

children together before they officially dissolved their marriage on April 19, 2010.

The dissolution of their marriage resulted in a divorce decree (decree) issued by

the Florida Circuit Court in Alachua County (circuit court). The decree included

provisions pertaining to “child support” and “alimony”. Under the heading “child

support”, the decree ordered petitioner to pay his ex-spouse monthly child support

of $1,795.63 starting April 19, 2010, and continuing each month until the




      2
        On brief respondent concedes that petitioner is not liable for the sec.
6662(a) accuracy-related penalty.
                                         -3-

[*3] happening of one of the following events: each child (1) reaches 18 years of

age,3 (2) dies, (3) marries, (4) enters military school, or (5) becomes self-sufficient.

      Additionally, under the heading “alimony”, the decree ordered petitioner to

pay monthly “permanent periodic alimony” of $1,592.50 for at least five years

commencing on the date of the final judgment and continuing until the occurrence

of one of the following events: (1) the youngest child’s 18th birthday, (2) the wife

or husband’s death, (3) the wife’s remarriage at the five-year point or anytime

thereafter, or (4) the wife becomes self-supporting. The decree also provided: “If,

at any time, the Husband receives a pay raise, then he shall immediately add 50%

of the net increase amount to his pay to the * * * alimony payment and shall

continue to make direct payments to the Wife for so long as she is entitled to

permanent periodic alimony under this subprovision.”

Modification of the Original Divorce Decree

      On November 7, 2011, the circuit court issued an “Order Modifying Child

Custody, Child Support, and Alimony” (modified decree). Because petitioner took

custody of an additional child, the modified decree reduced petitioner’s monthly


      3
        With respect to this contingency, the decree provided that support would
continue between the ages of 18 and 19 if the child was still in high school on his
or her 18th birthday. In this case the child support obligation would terminate in
May of each child’s graduation year.
                                       -4-

[*4] child support payment from $1,795.63 to $407.50. Despite its title the

modified decree did not change the monthly designated alimony payment or the

contingencies that would terminate those payments. Thus, as of November 7,

2011, petitioner’s monthly payment to his ex-spouse totaled $2,000, $407.50 of

which was designated as child support and $1,592.50 of which was designated as

alimony.

      Petitioner made payments to his ex-spouse in accordance with the modified

decree until March 2018.4

Tax Return and Notice of Deficiency

      On his Federal income tax return for 2015 petitioner claimed an alimony

deduction of $28,000. In a notice of deficiency dated November 29, 2017,

respondent disallowed the alimony deduction.

                                    OPINION

I.    Burden of Proof

      As a general rule the Commissioner’s determination of a taxpayer’s liability

in a notice of deficiency is presumed correct, and the taxpayer bears the burden of


      4
         At this time petitioner stopped making the designated alimony payments
to his ex-spouse because she became entitled to one-half of his military retirement
pay. In August 2019 the circuit court relieved petitioner of his spousal and child
support obligations.
                                         -5-

[*5] proving that the determination is incorrect.5 Rule 142(a); Welch v. Helvering,

290 U.S. 111, 115 (1993). Deductions are a matter of legislative grace, and the

taxpayer ordinarily bears the burden of proving entitlement to any deduction

claimed. Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992);

New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).

II.   Alimony Deduction

      Petitioner deducted alimony of $28,000 on his 2015 return. Petitioner

argues that the deduction was proper because the payments were made pursuant to

his obligation to pay “alimony” under the decree. He further contends that the

decree and the modified decree designated alimony and child support as two

separate payments. Conversely, respondent contends that petitioner’s designated

alimony payments were nondeductible child support payments because one of the

contingencies that would terminate the payments was petitioner’s youngest child’s

18th birthday. We agree with respondent.

      Section 215(a) and (b) allows a deduction to the payor for an amount equal

to the alimony paid during the taxable year to the extent it is includible in the

recipient spouse’s gross income under section 71(a). Whether a payment

      5
        Petitioner does not contend that the burden of proof should be shifted to
respondent pursuant to sec. 7491(a), and there is no justification on this record for
doing so. See Higbee v. Commissioner, 116 T.C. 438, 442-443 (2001).
                                         -6-

[*6] constitutes alimony is determined by reference to section 71(b)(1), which

defines “alimony” as any cash payment if: (1) the payment is received by a spouse

under a divorce or separation instrument; (2) the divorce or separation instrument

does not state that the payment is neither includible in gross income nor allowable

as a deduction; (3) the payor and payee spouses are not members of the same

household when the payment is made; and (4) the payment obligation terminates at

the death of the payee spouse and there is no liability to make either a cash or a

property payment as a substitute for the payment after the death of the payee

spouse.

      Section 71(c)(2), however, provides that the amount of any payment that is

subject to “contingencies involving child” must be considered payment made for

the support of the child. The Code specifically lists “child * * * attaining a

specified age” as an example of such a contingency. Sec. 71(c)(2)(A).

      We have previously decided that even if there are separately allocated child

support payments, other monthly payments made pursuant to a judicial decree will

still qualify as child support under section 71 if it contains an explicit contingency

related to a child. In Hammond v. Commissioner, T.C. Memo. 1998-53, 1998 Tax

Ct. Memo LEXIS 55, at *5, the taxpayer made monthly payments pursuant to a

divorce decree that stated that the payments would terminate on the earlier of the
                                        -7-

[*7] taxpayer’s child’s 18th birthday or the remarriage of the taxpayer’s ex-wife.

In addition to these monthly payments the taxpayer was obligated to make

separately allocated, fixed payments for child support. Id. at *4-*5. The taxpayer

in Hammond argued that because there was separately allocated child support, the

monthly payments at issue were alimony. We found no authority in support of the

taxpayer’s proposition and held that the amount of any payment that “will be

reduced on the happening of a contingency relating to a child” is child support and

not alimony regardless of the existence of a separate child support payment. Id.

at *8-*10.

      As in Hammond, the decree in the instant case clearly states that the

designated alimony payments would terminate on the contingency that petitioner’s

youngest child turns 18. This is the exact contingency relating to a child that is

listed as an example in section 71(c)(2)(A) that would qualify a payment as child

support. With this contingency, we are compelled to characterize the designated

alimony payments at issue as child support.

      Petitioner argues that the amounts designated as alimony under the decree

are deductible because the decree differentiates between alimony and child

support. It is true that the decree specifically designated the amounts of spousal

and child support. However, as we held in Hammond, although the divorce decree
                                         -8-

[*8] designates amounts to child support and alimony, the alimony payments will

still qualify as child support if the decree has a contingency relating to a child.

      In addition petitioner argues that he and his ex-spouse never intended to

make their youngest child’s 18th birthday a contingency for the termination of the

designated alimony payment. In defining alimony section 71(b) does not list the

parties’ intent as a factor. Thus, the Court cannot rely on the intent of the parties

in determining whether a payment should be characterized as alimony for Federal

income tax purposes; it must apply the explicit requirements listed under section

71(b). See Johnson v. Commissioner, T.C. Memo. 2014-67, at *5. Therefore,

petitioner’s argument that the parties intended that the designated alimony

payments would continue indefinitely, regardless of the contingency relating to his

youngest child’s 18th birthday, is unavailing. That the designated alimony

payments were also subject to termination contingencies relating to petitioner’s

ex-spouse does not change this result. See id. at *7-*8.

      Because we are compelled to characterize the payments at issue as child

support, we sustain respondent’s disallowance of petitioner’s alimony deduction.

We have considered all other arguments made by the parties, and to the extent not

discussed above, find those arguments to be irrelevant, moot, or without merit.
                                       -9-

[*9] To reflect the foregoing and the parties’ concessions,


                                             Decision will be entered for

                                      respondent as to the deficiency and

                                      for petitioner as to the accuracy-related

                                      penalty.
