                     T.C. Summary Opinion 2008-50



                        UNITED STATES TAX COURT



                  WALTER J. PRZEWOZNIK, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 15519-06S.           Filed May 5, 2008.



        Jonathan P. Decatorsmith and Todd Melton (specially

recognized), for petitioner.

     Julie A. Jebe, for respondent.



     GOLDBERG, Special Trial Judge:     This case was heard pursuant

to section 7463 of the Internal Revenue Code in effect at the

time the petition was filed.    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.     Unless otherwise indicated, subsequent section references
                               - 2 -

are to the Internal Revenue Code in effect for the year in issue,

and all Rule references are to the Tax Court Rules of Practice

and Procedure.

     Respondent determined a $3,113 deficiency in petitioner’s

Federal income tax for 2004.   The sole issue for decision is

whether petitioner is entitled to an alimony deduction of

$12,4611 for the taxable year in issue.

                            Background

     The stipulation of facts and the attached exhibits are

incorporated herein by reference.   At the time the petition was

filed, petitioner resided in Illinois.

     During the year in issue, petitioner was employed as a

posting supervisor (responsible for managing the advertising

schedule and maintenance on billboards) with Clear Channel

Outdoor in Chicago.

     Petitioner and his former spouse, Lisa Colquitt (Ms.

Colquitt) were married on October 23, 1982, in Cook County,

Illinois.   Two children were born of the marriage.   On September

16, 2003, a Judgment of Dissolution of Marriage (judgment) was

entered in the Circuit Court of Cook County, Illinois, Domestic




     1
       Although petitioner claimed an alimony deduction for
payments totaling $12,461 for 2004, the record indicates that
petitioner actually made payments totaling only $12,000 during
2004.
                                - 3 -

Relations Division (circuit court).     When the judgment was

entered, one of the children--K.P.--was a minor.

     In article III of the judgment, the circuit court ordered

petitioner to make monthly payments of $1,000 described as

“unallocated family support.”    With respect to “the minor child”

the judgment states that petitioner’s “obligation[2] for the child

as detailed in this Agreement” would cease when “the child

reaches majority or graduates from high school, whichever occurs

last, but in no case later than January 15, 2005.”      K.P.

graduated from high school in June 2004 and turned 18 later that

year.    The judgment awarded sole care and custody of K.P. to Ms.

Colquitt.

     The judgment is otherwise silent as to whether the payments,

or any part thereof, were to be deductible as alimony by

petitioner and includable in gross income by Ms. Colquitt.      The

judgment itself is also silent as to whether petitioner’s

obligation to make the payments would survive Ms. Colquitt’s

death.

     The judgment incorporates a Uniform Order for Support

(order), which was also entered by the circuit court on September

16, 2003.    The order characterizes the payments at issue as

“unallocated support” rather than “maintenance” or “child

support”.    The order lists K.P. as the “Child/ren covered by this

     2
         “Obligation” is not defined in the judgment.
                                - 4 -

order”.    With respect to the termination of the payments, the

order states:

           TERMINATION. This obligation to pay child support
     terminates on January 15, 2005 unless modified by
     written order of the Court. The termination does not
     apply to any arrearage that may remain unpaid on that
     date.

     The order also provides that the payments at issue were to

be made through an order of support lodged with Clear Channel

Outdoor.    The payments were accordingly then deducted from

petitioner’s paychecks bimonthly, and were remitted to Ms.

Colquitt through the Illinois Child Support Disbursement Center.

In accordance with the terms of the judgment a final payment of

$500 was deducted from petitioner’s pay and remitted to Ms.

Colquitt on January 15, 2005.

                             Discussion

     The Commissioner’s determinations are presumed correct, and

taxpayers generally bear the burden of proving otherwise.      Welch

v. Helvering, 290 U.S. 111, 115 (1933).    Petitioner did not argue

that section 7491 is applicable, nor did he establish that the

burden of proof should shift to respondent.    Moreover, the issue

involved in this case--alimony--is a legal one to be decided on

the record without regard to the burden of proof.    Petitioner,

therefore, bears the burden of proving that respondent’s

determination in the notice of deficiency is erroneous.    See Rule

142(a); Welch v. Helvering, supra at 115.
                               - 5 -

     Section 215 allows an individual a deduction for alimony or

separate maintenance payments made during a year if those amounts

are includable in the gross income of the recipient under section

71(a).   However, payments to support children generally are not

deductible.   See sec. 71(c)(1).   Section 215 provides in relevant

part:

     SEC. 215. ALIMONY, ETC., PAYMENTS

          (a) General Rule.--In the case of an individual, there
     shall be allowed as a deduction an amount equal to the
     alimony or separate maintenance payments paid during such
     individual’s taxable year.

          (b) Alimony or Separate Maintenance Payments Defined.--
     For purposes of this section, the term “alimony or separate
     maintenance payment” means any alimony or separate
     maintenance payment (as defined in section 71(b)) which is
     includible in the gross income of the recipient under
     section 71.

     Section 71(a) provides that “Gross income includes amounts

received as alimony or separate maintenance payments.”   As

previously stated, alimony or separate maintenance payments are

defined by section 71(b)(1), 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
                               - 6 -

                  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.

     The test under section 71(b)(1) is conjunctive; a payment is

deductible as alimony only if all four requirements of section

71(b)(1) are satisfied.   See Jaffe v. Commissioner, T.C. Memo.

1999-196.   The judgment is silent as to whether the petitioner

would be required to make payments upon the death of the Ms.

Colquitt.   Therefore, we must turn to the relevant law of the

jurisdiction.   Morgan v. Commissioner, 309 U.S. 78, 80 (1940);

Kean v. Commissioner, T.C. Memo. 2003-163, affd. 407 F.3d 186 (3d

Cir. 2005).

     Illinois law provides that “Unless otherwise agreed by the

parties in a written agreement set forth in the judgment or

otherwise approved by the court, the obligation to pay future

maintenance is terminated upon the death of either party”.    750

Ill. Comp. Stat. Ann. 5/510(c) (West 2004).   Accordingly, it

appears that the judgment meets the criteria set forth in section
                               - 7 -

71(b)(1).   Section 71(c)(1), however, provides that section 71(a)

“shall not apply to that part of any payment which the terms of

the divorce or separation agreement fix * * * as a sum which is

payable for the support of children of the payor spouse.”

     Petitioner argues that because the judgment is silent as to

a fixed amount of child support, the “unallocated family support”

payments must be alimony.   See Commissioner v. Lester, 366 U.S.

299 (1961).   Petitioner relies on Lester for the proposition that

unless the judgment specifies a specific sum as child support,

none of an “unallocated” payment will be treated as child support

under section 71(c)(1).   To be sure, in applying Lester, this

Court had repeatedly refused to allow inference, intent, or other

nonspecific designations--such as “unallocated family support”--

to override the clearly defined rule of section 71(c)(1).   See,

e.g., Mass v. Commissioner, 81 T.C. 112, 123 (1983); Blakey v.

Commissioner, 78 T.C. 963 (1982); Giordano v. Commissioner, 63

T.C. 462 (1975); Grummer v. Commissioner, 46 T.C. 674 (1966).

     The Deficit Reduction Act of 1984, Pub. L. 98-369, sec. 422,

98 Stat. 795, which is applicable to divorce instruments executed

after December 31, 1984, amended section 71 and overturned the

result in Lester that held that no amount would be considered

child support unless it was specifically designated as such in

the divorce or separation agreement.
                                - 8 -

     Under the current statute, if any amount specified in the

instrument will be reduced:    (1) Upon the happening of a

contingency related to a child of the payor or (2) at a time

which can clearly be associated with such a contingency, then the

amount of the specified reduction will be treated as child

support rather than alimony.    Sec. 71(c)(2); Berry v.

Commissioner, T.C. Memo. 2005-91.

     With respect to section 71(c)(1), petitioner makes the

following contentions as to why the payments at issue are alimony

and not child support:   (1) The term “unallocated family

support”--as used in the judgment--does not explicitly fix a sum

as child support; (2) article III of the judgment does not refer

specifically to any child; (3) petitioner and Ms. Colquitt

reached a compromise during their divorce proceedings (and before

entry of the judgment) that petitioner would pay Ms. Colquitt a

“settlement sum of $12,000 in monthly installments” and the

payments in issue were in accordance with this agreement; and (4)

the contingency clause in article VIII of the judgment has no

bearing as to the classification of the payments.    On the basis

of the foregoing, petitioner believes that he is entitled to an

alimony deduction for the payments he made in 2004.    For the

reasons discussed infra, we disagree.

     We first note that State law provides no guidance as to the

meaning of “unallocated family support”, as that term is not
                                - 9 -

defined by the Illinois statutes pertaining to matrimony.      We

also disagree with petitioner as to the presence of “clear

language” in the judgment that indicates that the payments

described in article III were intended to be for alimony and not

for child support.    Finally, we reject petitioner’s argument that

it was petitioner and Ms. Colquitt’s intention throughout their

divorce proceedings that petitioner would pay Ms. Colquitt a

$12,000 settlement in monthly installments of $1,000.    The

judgment is silent as to this purported agreement; and because

the $1,000 payments at issue began on October 1, 2003, and ended

on January 15, 2005, the total amount petitioner paid--$15,500--

also fails to comport with this alleged $12,000 settlement

figure.

     On the entire record before us, and for the reasons

discussed infra, we hold that the payments at issue were not

alimony.    While we do not rely exclusively on the language in the

contingency clause, it nonetheless supports our conclusion.

     First, we believe that the order is inextricably connected

with the payments provided for under article III of the judgment

because the order expressly refers to K.P. as the child “covered

by [the] order”.    As the only issue covered by the order is the

$1,000 payments, we fail to see how the payments were not

contemplated as being for the support of petitioner’s minor

child.    Second, petitioner testified that the payments were
                              - 10 -

deducted bimonthly from his paycheck and remitted--pursuant to

the order--to Ms. Colquitt by the Illinois Child Disbursement

Center.   We fail to see how that particular agency would be used

other than for the disbursement of child support payments.

Finally, the order’s termination clause, previously quoted,

specifically refers to the $1,000 monthly payments as “child

support” and states that the “child support terminates on January

15, 2005.”   Petitioner testified that a final payment was

deducted from his paycheck on January 15, 2005.   Accordingly, and

on the basis of the foregoing, we fail to see how petitioner and

Ms. Colquitt’s use of the term “unallocated family support”

could--by itself--characterize the payments as alimony where the

aforementioned facts suggest the contrary.

     Moreover, pursuant to section 72(c), the contingency clause

in the judgment supports our conclusion because it reduced the

amount of petitioner’s payments as a result of either the

happening of an event related to K.P. or at a time clearly

associated with such an event.   The last deduction from

petitioner’s pay occurred on January 15, 2005, the same date

specified in the contingency clause.   We simply do not follow

petitioner’s argument that the date of his last payment and the

date specified in the contingency clause were identical as a

result of coincidence.   We are also not persuaded to hold for

petitioner on the ground that January 15, 2005, was not the date
                              - 11 -

on which K.P. turned 18 or graduated from high school (the two

events specifically mentioned in the contingency clause).

     Our review of the entire record--including the contingency

clause--has led us to conclude that the phrase “unallocated

family support” as used in the judgment is not alimony but child

support.   The facts lead us to conclude that the monthly payments

at issue, which were made pursuant to an order referring to the

payments as “child support”, and which ended on a date specified

in a contingency clause in the judgment, were--for child support.

The facts indicate the true nature of the payments was for child

support and not alimony, and taking into account that the

cessation date of the payments comports with a date specified in

a contingency clause pursuant to section 72(c), we cannot hold

that petitioner is entitled to an alimony deduction on the basis

of his use of the ambiguous term “unallocated family support”.

     Accordingly, and on the basis of the foregoing,


                                          Decision will be entered

                                       for respondent.
