                  T.C. Summary Opinion 2005-50



                     UNITED STATES TAX COURT



                  GERALD BARLOW, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 5956-04S.            Filed April 19, 2005.


     Gerald Barlow, pro se.

     Lauren B. Epstein, for respondent.



     PANUTHOS, Chief 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.   The decision

to be entered is not reviewable by any other court, and this

opinion should not be cited as authority.   Unless otherwise

indicated, all subsequent section references are to the Internal

Revenue Code in effect at relevant times.
                                - 2 -

     Respondent determined a deficiency of $5,214 in petitioner’s

Federal income tax for 2000.    The sole issue for decision is

whether payments of $23,3781 petitioner made to his former spouse

during the year in issue were properly deductible as alimony.

                              Background

     Some of the facts have been stipulated, and they are so

found.    The stipulation of facts and the attached exhibits are

incorporated by this reference.    At the time of filing the

petition, petitioner resided in Lakeland, Florida.

     Petitioner and his former wife divorced on July 15, 1991,

after 37 years of marriage.    Their divorce proceedings were

adjudicated by the Circuit Court of Polk County, Florida (Florida

circuit court).

     In a Final Judgment of Dissolution of Marriage (divorce

decree), dated July 15, 1991, the Florida circuit court ordered

an equitable distribution of marital assets and awarded alimony

to petitioner’s former wife.    As relevant to this discussion, the

equitable distribution of marital assets included a provision

addressing the division of petitioner’s retirement plan




     1
         All amounts have been rounded to the nearest dollar.
                                 - 3 -

benefits.    Specifically, the divorce decree provided:

     1. Equitable distribution of marital assets shall be
     as follows:

                  *    *    *    *       *   *   *

            d.   The Wife is further awarded the following:

                  *    *    *    *       *   *   *

                  4. One-half of Husband’s retirement plan
                  with City of Lakeland and one-half of
                  Husband’s retirement/pension plan with State
                  of Florida.

In regard to alimony, the Florida circuit court, in a separate

provision of the divorce decree, ordered:

     2. The Husband shall pay to the Wife the alimony
     awarded to her in this Court’s Temporary Order dated
     February 25, 1991.

The above-referenced Temporary Order dated February 25, 1991, was

entered by the Florida circuit court following a hearing on

petitioner’s former wife’s Motion for Temporary Alimony.        The

Court ordered:     “The Husband shall pay to the Wife temporary

alimony in the amount of $1,500.00 per month.        Same shall be

payable weekly in the amount of $348.84 to begin on February 15,

1991 until further notice.”

     On December 18, 1992, petitioner and the City of Lakeland

entered into an assignment agreement with respect to petitioner’s

Employee Pension Plan and Police Officer’s Supplemental
                                - 4 -

Retirement Plan (supplemental plan).2   Pursuant to the terms of

the assignment, petitioner’s former wife was assigned a one-half

interest in petitioner’s net monthly retirement benefits from

both the Employee Pension Plan and the supplemental plan.

     In taxable year 2000, petitioner’s former wife received

total payments of $23,378 from petitioner’s retirement plans with

the City of Lakeland, consisting of $16,347 from petitioner’s

Employee Pension Plan and $7,031 from petitioner’s supplemental

plan.    There is no evidence that petitioner made any other

payments to his former wife in 2000.3

     On his 2000 Federal income tax return, petitioner claimed a

deduction of $23,378 for alimony payments.    In a notice of

deficiency dated January 6, 2004, respondent disallowed the

deduction on the ground that the payments did not constitute

alimony.




     2
        Although the divorce decree referred to petitioner’s
retirement plans with the City of Lakeland and the State of
Florida, the record in this case does not involve any retirement
plan with the State of Florida.
     3
        There is no evidence in the record that petitioner made
any payments in 2000 in accordance with his obligation to pay
alimony of $1,500 per month. Petitioner’s obligation to provide
spousal support may have terminated. Regardless, it is clear
from the record that petitioner relied solely upon the
assignments from his City of Lakeland retirement plans as the
basis for claiming an alimony paid deduction on his 2000 return.
                               - 5 -

                           Discussion

     The Federal tax consequences to both the paying spouse and

receiving spouse of a payment made incident to divorce depend

upon the characterization of such payment.    Property settlements,

or equitable divisions of marital property, are generally neither

deductible from the income of the paying spouse nor includable in

the income of the receiving spouse.    Sec. 1041.   On the other

hand, payments made or received as alimony are generally

deductible by the paying spouse under section 215(a) and

includable in gross income by the receiving spouse under sections

61(a)(8) and 71.

     Section 215(b) provides that the paying spouse may deduct a

payment as alimony if the payment is “includible in the gross

income of the recipient under section 71”.    Section 71(b)(1)

defines an alimony payment as any cash payment meeting each of

the following four criteria:

          (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
                                - 6 -

     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.

     Respondent contends that the $23,378 paid from petitioner’s

City of Lakeland retirement plans is not alimony because

petitioner does not satisfy either subparagraph (B) or (D) of

section 71(b)(1).

     We first address the requirement at section 71(b)(1)(B),

which provides that a payment will not be alimony if the

governing divorce or separation instrument designates the payment

as not includable in gross income under section 71 and not

allowable as an alimony deduction under section 215.    A divorce

or separation instrument “contains a nonalimony designation if

the substance of such a designation is reflected in the

instrument”.    Estate of Goldman v. Commissioner, 112 T.C. 317,

323 (1999), affd. sub nom. Schutter v. Commissioner, 242 F.3d 390

(10th Cir. 2000).   Generally, the divorce or separation agreement

must provide a “clear, explicit and express direction” that the

payments are not to be treated as alimony, but the designation

need not mimic the statutory language of sections 71 and 215.

Richardson v. Commissioner, 125 F.3d 551, 556 (7th Cir. 1997),

affg. T.C. Memo. 1995-554; Estate of Goldman v. Commissioner,

supra at 323.

     In this case, the language of the divorce decree

unambiguously designates the payments from petitioner’s
                                 - 7 -

retirement plan benefits as nonalimony.   Petitioner’s former wife

was awarded a one-half interest in petitioner’s retirement plan

benefits pursuant to paragraph 1 of the divorce decree, which

began:   “Equitable distribution of marital assets shall be as

follows”.   Among the items of marital assets subject to equitable

distribution were petitioner’s retirement plan benefits, as

specifically addressed in paragraph 1.d.4 of the divorce decree.

While the Florida circuit court also specifically granted alimony

to petitioner’s former wife, this award was made pursuant to

paragraph 2 of the divorce decree and was not part of the Florida

circuit court’s equitable distribution of marital assets.

     We conclude that the divorce decree clearly, explicitly, and

expressly designated the payments from petitioner’s retirement

plans as nonalimony payments.4

     Since petitioner does not satisfy subparagraph (B) of

section 71(b)(1), it is unnecessary to consider subparagraph (D)

of the same section.   Respondent’s determination that petitioner

is not entitled to an alimony deduction in 2000 is sustained.




     4
        Moreover, the Florida circuit court, in a postdivorce
hearing convened on Feb. 28, 1992, to address petitioner’s
request to modify the divorce decree’s distribution of his
retirement plan benefits, concluded that the distribution was “a
property plan distribution the court made” and that the decision
“was not modifiable because it’s not alimony”.
                                - 8 -

    Reviewed and adopted as the report of the Small Tax Case

Division.

    To reflect the foregoing,


                                        Decision will be entered

                                for respondent.
