                         T.C. Memo. 1997-219



                       UNITED STATES TAX COURT



                STEPHEN A. RAYMOND, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent

                SANDRA C. RAYMOND, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 18033-95, 24063-95.             Filed May 8, 1997.



     Stephen A. Raymond, pro se in docket No. 18033-95.

     Sandra C. Raymond, pro se in docket No. 24063-95.

     Melanie Garger, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION

     CHIECHI, Judge:    Respondent determined the following with

respect to petitioners' respective Federal income tax for 1991:
                                  - 2 -

                                  Addition to Tax    Accuracy-Related Penalty
      Petitioner     Deficiency   Sec. 6651(a)(1)1         Sec. 6662(a)

Stephen A. Raymond    $13,181              --                   --
Sandra C. Raymond       3,964             $198                 $793


         The issue remaining for decision is whether certain payments

  made during 1991 by petitioner Stephen A. Raymond (Mr. Raymond)

  to petitioner Sandra C. Raymond (Ms. Raymond)2 constitute alimony

  within the meaning of section 71(b) that is deductible by Mr.

  Raymond under section 215(a) and that is includible in the income

  of Ms. Raymond under section 71(a).      We hold that they do.

                            FINDINGS OF FACT

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

         At the time the petitions in these cases were filed, Mr.

  Raymond and Ms. Raymond lived separately in Charlestown, Massa-

  chusetts, and Carlisle, Massachusetts, respectively.      Mr. Raymond

  filed his U.S. individual income tax return (return) for 1991 on

  May 4, 1992, and Ms. Raymond filed her 1991 return on October 26,

  1992.

         The Raymonds were married on June 14, 1965, and have two

  children, Sonya and Jessica, who were born on November 12, 1970,

  and February 27, 1978, respectively.      During 1991, Sonya Raymond,


  1
     All section references are to the Internal Revenue Code in
  effect for the year at issue. All Rule references are to the Tax
  Court Rules of Practice and Procedure.
  2
     We shall sometimes refer to Mr. Raymond and Ms. Raymond as the
  Raymonds.
                               - 3 -

who was 20 years old, was a student at Stanford University and

Jessica Raymond, who was 13 years old, lived at home with her

mother.

     On September 12, 1990, Mr. Raymond filed for divorce, and on

August 27, 1991, Ms. Raymond counterclaimed for divorce (divorce

proceedings).   On October 4, 1990, Mr. Raymond, who was repre-

sented by J. Walter Freiberg III (Mr. Freiberg), and Ms. Raymond,

who was represented by Kathleen Ann Foley (Ms. Foley), entered

into a stipulation for temporary support (support stipulation).

On October 4, 1990, the Trial Court of the Commonwealth of

Massachusetts, Probate and Family Court Department, Middlesex

Division (Probate Court), entered a temporary order (temporary

order) that incorporated the support stipulation.   The temporary

order provided in pertinent part:

     1.   Neither party shall harass or abuse each other or
     interfere with the personal liberty of each other.

     2.   The parties shall live apart with the Wife having
     sole possession of the former marital home.

     3.   Neither party shall convey or transfer or sell any
     asset except to pay normal usual obligations.

     4.    The Husband shall maintain the existing health
     insurance, dental insurance and life insurance poli-
     cies.

     5.   Neither party shall change any designation of
     beneficiaries on any policies, pension or retirement
     plans or IRAs.

                *    *     *     *     *     *      *
                               - 4 -

     7. The parties shall be responsible for their own
     uninsured medical expenses and shall share Jessica &
     Sonya's uninsured medical expenses equally.

     8. The Husband shall give the Wife his net pay less
     $900.00 every month on the first day of every month
     commencing November 1, 1990, or thereabouts. This
     matter will be reviewed January 2, 1991. The Husband
     shall give the Wife a copy of his payroll advice on the
     first of every month.

     9. Legal custody of Jessica shall be joint, while
     mother shall have physical custody on a temporary
     basis, and father shall have full and normal visitation
     rights; provided, however, that the scheduling of the
     visitation shall be guided by the advise and counsel of
     Jessica's mental health professional who shall advise
     the parties as to the most appropriate parenting sched-
     ule; and also provided that Jessica's preferences shall
     be respected by both parties. Jessica should play a
     role in selecting the said therapist who shall be
     chosen and visited within 10 days.

     This shall be made into an order of the Court. * * *

     During 1991, pursuant to paragraph 8 of the support stipula-

tion that was incorporated into the temporary order, Mr. Raymond

made payments in cash to Ms. Raymond that totaled $41,455 (1991

temporary order payments).   Those payments constituted approxi-

mately 72 percent of the net amount of wages that Mr. Raymond

received during 1991 (i.e., approximately 72 percent of his gross

wages for that year reduced by Federal and State income taxes and

Social Security and Medicare taxes that were withheld).   Ms.

Raymond used at least a portion of the 1991 temporary order

payments to pay for certain expenses of Sonya and Jessica Ray-

mond.
                               - 5 -

     Mr. Raymond and Ms. Raymond anticipated filing a joint

return for 1990, and they did not designate in the support

stipulation that was incorporated into the temporary order that a

portion of the 1991 temporary order payments was alimony and that

a portion of such payments was child support.   At no time during

1990 or 1991 did the Probate Court conduct a review of the 1991

temporary order payments or take any other action with respect to

those payments.   Nor did Mr. Raymond and Ms. Raymond enter into a

stipulation or agreement during 1990 or 1991 that superseded the

support stipulation that was incorporated into the temporary

order.   However, during September 1991, Mr. Freiberg, Mr. Ray-

mond's attorney, and Robert L. Hernandez (Mr. Hernandez), whom

Ms. Raymond employed (in lieu of Ms. Foley) to represent her in

the divorce proceedings sometime after the support stipulation

was executed, exchanged letters on behalf of their respective

clients in an unsuccessful attempt to clarify and modify certain

matters relating to that support stipulation.

     On April 27, 1992, the Probate Court entered a judgment of

divorce nisi relating to Mr. Raymond's claim for divorce and a

judgment of divorce nisi relating to Ms. Raymond's counterclaim

for divorce.   (Those two judgments are referred to collectively

as the 1992 divorce judgments.)   The 1992 divorce judgments

provided in pertinent part:

     Husband is to pay to wife the sum of $2,600.00 per
     month beginning May 1, 1992 as alimony and child sup-
     port ($1,000.00 of which is alimony and which shall
                                 - 6 -

       terminate on the first to occur: the wife's death or
       remarriage, husband's death or May 1, 1994 and
       $1,600.00 per month for child support).

       In his return for 1991, Mr. Raymond deducted as alimony the

$41,455 in 1991 temporary order payments that he made to Ms.

Raymond during that year.    In the notice of deficiency (notice)

issued to Mr. Raymond for 1991, respondent determined that he was

not entitled to that deduction.

       In her 1991 return, Ms. Raymond did not include in income

any of the 1991 temporary order payments that she received from

Mr. Raymond during that year.    In the notice issued to Ms.

Raymond for 1991, respondent determined that she received alimony

of $41,455 that was includible in her income for that year.

                                OPINION

       Mr. Raymond and Ms. Raymond bear the burden of proving that

respondent's determinations in the respective notices are errone-

ous.    Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).

       Ms. Raymond argues that the 1991 temporary order payments

are at least in part payments for child support that are not

includible in her income for that year.    Mr. Raymond argues that

the 1991 temporary order payments constitute alimony within the

meaning of section 71(b) and that therefore those payments are

deductible by him and includible in Ms. Raymond's income pursuant

to sections 215(a) and 71(a), respectively.    Respondent's posi-

tion in these cases is that of a stakeholder.
                                 - 7 -

     Section 71(b)(1) defines the term "alimony or separate

maintenance payment" to mean any cash payment 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 sepa-
     rate 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.

     Section 71(c)(1) provides that section 71(a) generally is

not to apply to that part of any payment that the terms of the

divorce or separation instrument fix (in terms of an amount of

money or a part of the payment) as a sum which is payable for the

support of children of the payor spouse.    In applying section

71(c)(1), child support generally may not be inferred from

intent, surrounding circumstances, or other subjective criteria,

see Commissioner v. Lester, 366 U.S. 299, 306 (1961), except as

specified in section 71(c)(2).    The exception prescribed in

section 71(c)(2) is that if any amount specified in the divorce

or separation instrument is to be reduced (1) upon the occurrence

of a contingency specified in that instrument relating to a child

(e.g., attaining a specified age, marrying, dying, leaving
                              - 8 -

school, or a similar contingency) or (2) at a time that can

clearly be associated with that kind of contingency, an amount

equal to the amount of such reduction is to be treated for

purposes of section 71(c)(1) as an amount fixed as payable for

the support of children of the payor spouse.

     On the record before us, we find that the 1991 temporary

order payments are alimony or separate maintenance payments

within the meaning of section 71(b)(1), and not child support

payments within the meaning of section 71(c).   We therefore

reject Ms. Raymond's position and sustain Mr. Raymond's position

with respect to those payments.

     Ms. Raymond concedes that the 1991 temporary order payments

meet the definition of alimony in section 71(b)(1).   Specifi-

cally, Ms. Raymond concedes (1) that those payments were received

by Ms. Raymond under the temporary order that incorporated the

support stipulation, sec. 71(b)(1)(A) and (2)(C); (2) that the

temporary order does not designate the 1991 temporary order

payments as payments that are not includible in the gross income

of Ms. Raymond under section 71(a) and that are not allowable as

deductions under section 215(a), sec. 71(b)(1)(B); (3) that Mr.

Raymond and Ms. Raymond were not members of the same household at

the time the 1991 temporary order payments were made, sec.

71(b)(1)(C); and (4) that Mr. Raymond had no liability to make

the 1991 temporary order payments, or to make any payments (in
                              - 9 -

cash or property) as a substitute for those payments, for any

period after the death of Ms. Raymond, sec. 71(b)(1)(D).

     Nevertheless, Ms. Raymond takes the position that the 1991

temporary order payments, at least in part, also meet the defini-

tion of payments for child support in section 71(c).   In support

of that position, Ms. Raymond contends:   (1) The support stipula-

tion that was incorporated into the temporary order implies that

the 1991 temporary order payments are at least in part payments

for child support because it mentions the children of the

Raymonds by name and acknowledges that certain expenses were to

be incurred with respect to those children and that Ms. Raymond

was to have physical custody of Jessica Raymond on a temporary

basis; (2) Ms. Raymond used all or a portion of the 1991 tempo-

rary order payments to support the Raymonds' children; and

(3) the 1992 divorce judgments confirm that the 1991 temporary

order payments are at least in part payments for child support.3

     Although the record supports the first two of Ms. Raymonds'

contentions, section 71(c)(1) nonetheless requires us to find

that the terms of the temporary order that incorporated the

3
   Although Ms. Raymond appears to contend on brief that the
support stipulation that was incorporated into the temporary
order was not a valid, binding agreement, she conceded at the
trial of this case that "[the support stipulation that was
incorporated into the temporary order] is a binding agreement
which I did sign". The Probate Court considered the support
stipulation to be a valid, binding agreement which it incorpo-
rated into the temporary order that it entered in the Raymonds'
divorce proceedings pending a hearing on the merits or until
further order of that court.
                                 - 10 -

support stipulation do not fix either in terms of an amount of

money or a portion of the 1991 temporary order payments any part

of those payments as a sum that is payable for the support of the

children of Mr. Raymond.4      See Commissioner v. Lester, supra at

306.    Inferences, intent, or other nonspecific designations of

payments as child support are not sufficient to override the

mandate of section 71(c)(1), see id., except as permitted by

section 71(c)(2).    Section 71(c)(2) does not apply here because

there is no amount specified in the temporary order that was to

be reduced, let alone upon the occurrence of a contingency

specified in that order relating to a child of Mr. Raymond or at

a time that can clearly be associated with that kind of contin-

gency.    See sec. 71(c)(2).

       As for the third contention of Ms. Raymond that the 1992

divorce judgments confirm that the 1991 temporary order payments

are at least in part for child support, we find nothing in those

4
   On Apr. 28, 1997, we denied Ms. Raymond's motion to reopen the
record in these cases to admit into evidence an order issued by
the Probate Court on Nov. 20, 1996 (1996 order) which denied a
motion filed with that Court by Ms. Raymond for "Court Definition
and Verification" that the 1991 temporary order payments were
payments for child support. Assuming arguendo that the 1996
order were part of the trial record in these cases, it would not
have changed our holdings. In this connection, we note that in
dictum in the 1996 order, the Probate Court stated: "The parties
entered into a stipulation which designated such contribution by
husband to wife as alimony and child support". Even if the 1996
order were part of the record herein, we would not be bound by
such dictum. In any event, on the record before us, we have
found that the temporary order did not designate that a portion
of the 1991 temporary order payments was alimony and that a
portion of such payments was child support.
                               - 11 -

judgments to suggest that the Probate Court was retroactively

changing the temporary order so as to designate that the 1991

temporary order payments constitute at least in part child

support.5

     Based on the entire record before us, we find that Ms.

Raymond has failed to satisfy her burden of proving that the 1991

temporary order payments were for child support, and not alimony.

We further find that Mr. Raymond has satisfied his burden of

proving that the 1991 temporary order payments were alimony, and

not for child support.   Accordingly, we sustain respondent's

determination under section 71(a) with respect to Ms. Raymond,

and we reject respondent's determination under section 215(a)

with respect to Mr. Raymond.

     To reflect the foregoing,

                                         Decision will be entered

                                    for petitioner in docket No.

                                    18033-95.

                                         Decision will be entered

                                    under Rule 155 in docket No.

                                    24063-95.


5
   Ms. Raymond relies on, and Mr. Raymond and respondent discuss
and distinguish, our Memorandum Opinion in Heller v. Commis-
sioner, T.C. Memo. 1994-463. The Heller cases were recently
remanded in an unpublished disposition of the appeal of those
cases by the U.S. Court of Appeals for the Ninth Circuit. Heller
v. Commissioner, 103 F.3d 138 (9th Cir. 1996). In any event, we
find Heller, as well as the other cases on which Ms. Raymond
relies to support her position, to be factually distinguishable
from the present cases.
