                             T.C. Summary Opinion 2018-5



                            UNITED STATES TAX COURT



                  DAVID ALAN DEVALERIA, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 18396-16S.                            Filed January 31, 2018.



      David Alan Devaleria, pro se.

      Sandeep Singh, Victoria Z. Gu, and Trent D. Usitalo, for respondent.



                                 SUMMARY OPINION


      GUY, Special Trial Judge: This case was heard pursuant to the provisions

of section 7463 of the Internal Revenue Code in effect when the petition was

filed.1 Pursuant to section 7463(b), the decision to be entered is not reviewable by


      1
          Unless otherwise indicated, section references are to the Internal Revenue
                                                                          (continued...)
                                            -2-

any other court, and this opinion shall not be treated as precedent for any other

case.

        Respondent determined that petitioner is liable for a Federal income tax

deficiency of $1,836 and an accuracy-related penalty of $367.20 under section

6662(a) for the taxable year 2013 (year in issue). Petitioner filed a timely petition

for redetermination with the Court pursuant to section 6213(a). At the time the

petition was filed, petitioner resided in California.

        After a concession by respondent, the sole issue remaining for decision is

whether petitioner is entitled to a deduction for alimony paid to his former spouse

in excess of the amount respondent allowed.2

                                       Background3

        Petitioner and his former spouse were married for 19 years and have two

children. They separated and divorced in 2008.




        1
       (...continued)
Code, as amended and in effect for 2013, and Rule references are to the Tax Court
Rules of Practice and Procedure.
        2
       Respondent concedes that petitioner is not liable for an accuracy-related
penalty under sec. 6662(a) for the year in issue.
        3
            Some of the facts have been stipulated and are so found.
                                         -3-

      In conjunction with the couple’s divorce, the Superior Court of Arizona,

Maricopa County (superior court), directed petitioner to pay child support and

spousal maintenance. By minute entry dated July 24, 2008, the superior court

ordered petitioner, in relevant part, to make monthly spousal maintenance

payments of $1,500 to his former spouse for 42 months beginning March 1, 2010.

By order dated September 21, 2010, the superior court denied petitioner’s former

spouse’s motion to increase spousal maintenance, ordered petitioner to pay

monthly child support of $772.13, and noted that petitioner owed $1,707.78 in

child support arrearage. The order stated that an order of assignment would be

“initiated electronically” by the court’s deputy clerk.

      On October 12, 2010, the superior court issued an order of assignment

which included a schedule of petitioner’s child support and spousal maintenance

obligations, arrears and interest charges, and handling fees, items that totaled

$2,577.13 per month. The order of assignment stated that it modified and replaced

any previous order of assignment and directed that petitioner’s current and future

employers were obliged to withhold $2,577.13 per month from any payment due

to petitioner but that such withholding could not exceed 50% of his disposable
                                         -4-

earnings.4 Although the order of assignment stated that it was effective

(retroactive to) March 1, 2010, the portion of the order that set a termination date

was not completed. It stated: “This Order of Assignment terminates on the last

day of ___, ____ unless it includes an arrearage payment, in which case the total

amount listed above shall continue to be withheld until further order.”

      Petitioner explained that, notwithstanding the order of assignment, he made

child support and spousal maintenance payments directly to his former spouse

beginning in late 2011 through the end of 2013. Petitioner and his former spouse

had established an informal arrangement under which petitioner sometimes made

spousal maintenance payments to her in advance of the date the payments were

otherwise due.

      In 2013 petitioner issued checks to his former spouse every two weeks in

amounts that sometimes varied widely. Beginning January 2, 2013, through

July 31, 2013, petitioner paid approximately $18,000 to his former spouse. He

made additional payments of roughly $9,000 beginning in mid-August through the

end of the year.




      4
       Although the superior court issued orders of assignment before and after
the order of assignment dated October 12, 2010, those orders are not included in
the record of this case.
                                         -5-

      On March 30, 2014, petitioner sent an email to his former spouse stating in

relevant part that his obligation to make spousal maintenance payments had

expired in August 2013 and that he would not send her any additional spousal

maintenance payments.

      Petitioner filed a Federal income tax return for the taxable year 2013,

claiming a deduction of $19,930 for alimony payments. Respondent issued a

notice of deficiency to petitioner determining that he was entitled to a deduction

for alimony payments of $13,500 for 2013.

                                    Discussion

      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

proving that the determination is incorrect. Rule 142(a); Welch v. Helvering, 290

U.S. 111, 115 (1933). Tax deductions are a matter of legislative grace, and the

taxpayer 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).

      Under certain circumstances, the burden of proof with respect to particular

factual issues may shift to the Commissioner under section 7491(a). Petitioner has

not asserted that section 7491(a) applies in this case. In any event, we see no
                                         -6-

justification on this record for shifting the burden of proof to respondent in

respect of any factual issue.

      Section 71(a) provides the general rule that gross income includes amounts

received as alimony or separate maintenance payments. Section 215(a) allows a

deduction to the payor for an amount equal to the alimony paid during the taxable

year to the extent it is includable in the recipient spouse’s gross income under

section 71(a).

      Whether a payment constitutes alimony is determined by reference to

section 71(b)(1), which defines “alimony” as any cash payment if (A) the payment

is received by 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 includable in gross income under section 71 and not allowable as a deduction

under section 215, (C) the payor and payee spouses are not members of the same

household when the payment is made, and (D) 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.

      Respondent acknowledges that petitioner is entitled to a deduction for

alimony paid to his former spouse in 2013 as directed by the superior court.
                                         -7-

Respondent maintains, however, that the superior court ordered that petitioner’s

obligation to make spousal maintenance payments expired in August 2013, and,

therefore, any payments after that date were voluntary and do not constitute

alimony within the meaning of section 71(b)(1). See, e.g., Herring v.

Commissioner, 66 T.C. 308, 310-311 (1976).

      Petitioner asserts that the superior court’s order of assignment dated

October 12, 2010, extended his obligation to make spousal maintenance payments

indefinitely. Thus, he maintains that all the payments that he made to his former

spouse in 2013 qualify as alimony within the meaning of the statute. We disagree.

      The superior court issued a minute entry dated July 24, 2008, establishing

petitioner’s obligation to make monthly spousal support payments until August

2013. The 2010 order of assignment, which was issued to provide a means for

collecting spousal and child support payments, makes no mention of the minute

entry dated July 24, 2008. Petitioner cites no authority for the proposition that the

2010 order of assignment modified (i.e., extended indefinitely) his obligation to

make spousal support payments, and we are aware of none.5 Moreover,

      5
        Bearing in mind that the 2010 order of assignment stated that it modified
and replaced an earlier order of assignment, we find it noteworthy that the superior
court issued a subsequent order of assignment in 2011. The order of assignment
issued in 2011 is not part of the evidentiary record, however, and without it we are
                                                                       (continued...)
                                          -8-

petitioner’s position is undermined by an email that he sent to his former spouse in

April 2014 stating that his obligation to make spousal support payments

terminated in August 2013.

      Petitioner asserts in the alternative that he had intended that the payments he

made to his former spouse through the end of 2013 would be treated as alimony

and that his former spouse accepted the payments as such.6 As we have explained

in the past, however: “Congress eliminated any consideration of intent in

determining the deductibility of a payment as alimony in favor of a more

straightforward, objective test that rests entirely on the fulfillment of explicit

requirements set forth in section 71.” See Okerson v. Commissioner, 123 T.C.

258, 264-265 (2004) (citing Hoover v. Commissioner, 102 F.3d 842, 844-845 (6th

Cir. 1996), aff’g T.C. Memo. 1995-183). In this case, the superior court set a

schedule which provided for the termination of petitioner’s obligation to make

spousal maintenance payments in August 2013.




      5
        (...continued)
left to question whether the 2010 order of assignment had been modified and
replaced.
      6
       There is no objective evidence in the record in respect of petitioner’s
former spouse’s tax treatment of the payments in dispute.
                                         -9-

      Consistent with the foregoing, we conclude that the disputed payments that

petitioner made to his former spouse were voluntary and hence did not qualify as

alimony under sections 71(a) and 215(a). See, e.g., Abood v. Commissioner, T.C.

Memo. 1990-453. Accordingly, respondent’s determination disallowing a portion

of the alimony deduction that petitioner claimed for the year in issue is sustained.

      To reflect the foregoing,


                                               An appropriate decision

                                       will be entered.
