                   T.C. Summary Opinion 2011-91



                       UNITED STATES TAX COURT



               DAN VLADIMIR NICOLAS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 28343-09S.             Filed July 14, 2011.



     Dan Vladimir Nicolas, pro se.

     John D. Davis, for respondent.



     VASQUEZ, Judge:    This case was heard pursuant to the

provisions of section 7463 of the Internal Revenue Code (Code) in

effect when the petition was filed.1   Pursuant to section

7463(b), the decision to be entered is not reviewable by any



     1
        Unless otherwise indicated, all section references are to
the Code in effect for the year in issue, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
                               - 2 -

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

for any other case.

     Respondent determined a $937 deficiency in petitioner’s 2007

Federal income tax.   The issue for decision is whether petitioner

is entitled to deduct as alimony under section 215 court-ordered

payments of attorney’s fees and costs to his former wife.

                            Background

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

The stipulations of facts and the attached exhibits are

incorporated herein by this reference.   Petitioner resided in

Oregon when the petition was filed.

     Petitioner was formerly married to Marta Eugenia Nicolas

(Ms. Nicolas).   In 2003 the Oregon Circuit Court for Multnomah

County (State court) entered judgment dissolving their marriage

(dissolution judgment).   The dissolution judgment ordered

petitioner to pay spousal support to Ms. Nicolas of $400 per

month from March 1 through October 1, 2003.    The dissolution

judgment also contained a provision allowing the parties to

request attorney’s fees and costs.

     In 2004 the State court granted Ms. Nicolas’ request for

attorney’s fees and issued a supplemental judgment for attorney

fees (supplemental judgment) ordering petitioner to pay Ms.

Nicolas attorney’s fees and costs of $6,829.    The State court

concluded such an award was appropriate because petitioner had

more funds available and was in a better position to pay than Ms.
                                 - 3 -

Nicolas.   The supplemental judgment states that the award of

attorney’s fees and costs is in addition to, and not in lieu of,

the judgments granted in the dissolution judgment.    The

supplemental judgment does not state whether petitioner’s

obligation to pay the attorney’s fees and costs would continue if

Ms. Nicolas were to pass away.    Petitioner was not required to

pay the attorney’s fees and costs until 18 months after the

supplemental judgment was signed; but once the payment became

due, interest accrued until paid.

     During 2007 petitioner paid $6,178 of the attorney’s fees

and costs.   He deducted this amount on his Form 1040, U.S.

Individual Income Tax Return, for 2007.    Respondent determined,

in a notice of deficiency, that petitioner was not entitled to

deduct as alimony the $6,178 of attorney’s fees and costs

petitioner paid to Ms. Nicolas.

                              Discussion

     Deductions are a matter of legislative grace, and the

taxpayer bears the burden of proving his entitlement to the

claimed deductions.   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).

     Section 215(a) permits a deduction for the payment of

alimony during a taxable year.    Section 215(b) defines “alimony”

as alimony which is includable in the gross income of the

recipient under section 71.    Section 71(b)(1) defines alimony as
                               - 4 -

any cash payment meeting the four criteria provided in

subparagraphs (A) through (D) of that section.2   Accordingly, if

any portion of the payments made by petitioner fails to meet any

one of the four enumerated criteria, that portion is not alimony

and petitioner cannot deduct it.

     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


     2
         Sec. 71(b)(1) provides:

          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 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.
                                - 5 -

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

Nicolas.

       Under section 71(b)(1)(D), in order to deduct a payment as

alimony the payor must have no liability to continue making

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).

       The supplemental judgment is silent as to whether

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

would terminate in the event of Ms. Nicolas’ death.     Thus, we

consider whether the payments terminate by operation of Oregon

law.
                               - 6 -

     Or. Rev. Stat. section 107.105(1)(j) (2009) authorizes a

court granting a dissolution of marriage to order one party to

pay reasonable attorney’s fees and costs to the other party or

the other party’s attorney.   There is no provision in Or. Rev.

Stat. section 107.105(1)(j) or any related statute terminating

the payor’s obligation to pay attorney’s fees upon the death of

the payee spouse.   Furthermore, rule 68 of the Oregon Rules of

Civil Procedure, which governs the procedure for the allowance of

attorney’s fees, does not state whether the payor’s obligation to

pay attorney’s fees ceases on the death of the payee.    The

parties point us to no authority, and we have discovered none,

that expressly states whether the obligation of court-ordered

payment of attorney’s fees and costs ceases upon the death of the

payee spouse.   Additionally, caselaw provides no assistance as

there is uncertainty under Oregon law whether spousal support

payments terminate upon the death of the payee spouse.    See

Linder v. Dept. of Revenue, 18 Or. Tax 11, 15 n.4 (2004) (Oregon

Tax Court noting the disagreement under Oregon law as to whether

spousal support payments terminate upon the death of the payee

spouse).   Therefore, we conclude that Oregon State law is

ambiguous.

     Finally, faced with a silent court order and no State law

resolution of the question, we independently review the judgment

itself to make our own determination as to the satisfaction of

the section 71(b)(1)(D) requirement.   See Hoover v. Commissioner,
                                 - 7 -

supra at 846.   Nothing in the judgment indicates that

petitioner’s obligation to pay Ms. Nicolas’ attorney’s fees would

terminate on her death.    In fact the supplemental judgment

specifically requires petitioner to pay interest on the

attorney’s fees until paid.    Such payment is not made contingent

on any factor or event.    We have no reason to conclude that

petitioner’s obligation to pay Ms. Nicolas’ attorney’s fees

terminates on her death.    Hence, the payments do not satisfy the

requirements of section 71(b)(1)(D), and petitioner is not

entitled to deduct as alimony the payments to Ms. Nicolas for

attorney’s fees and costs.

     To reflect the foregoing,


                                              Decision will be entered

                                         for respondent.
