                  T.C. Summary Opinion 2006-128



                     UNITED STATES TAX COURT



              CHARLES HORTON DEVERS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 3227-05S.              Filed August 21, 2006.


     Charles Horton Devers, pro se.

     Steven W. LaBounty, for respondent.



     ARMEN, 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   The decision to be entered

is not reviewable by any other court, and this opinion should not

be cited as authority.




     1
        Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for 2002,
the taxable year in issue.
                               - 2 -

     Respondent determined a deficiency in petitioner’s Federal

income tax for 2002 in the amount of $9,350.

     After concessions by respondent, the sole issue for decision

is whether petitioner properly deducted attorney’s fees paid in

2002 as alimony under section 71(b).     We hold that he did not.

                            Background

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

found.   We incorporate by reference the parties’ stipulation of

facts and accompanying exhibits.

     At the time the petition was filed, Charles H. Devers

(petitioner) resided in St. Louis, Missouri.

     Petitioner and Nadine F. (Lundsgaard) Devers (Ms. Devers)

were married in August 1973 and separated in January 2001.     Ms.

Devers filed a petition seeking a dissolution of her marriage to

petitioner on August 1, 2001, in the Circuit Court of St. Louis

County, Missouri (Family Court Cause No. 01FC-7461).     A Judgment

Pending Dissolution Proceeding (PDL) (sometimes referred to as an

Order Pendente Lite) was filed on December 17, 2001, and required

petitioner to pay $5,000 to Aaron Dubin (Mr. Dubin), attorney for

Ms. Devers, “as and for attorney fees on account”.     Petitioner

did not appeal the order.   The PDL did not specify whether

petitioner’s obligation to pay the $5,000 would terminate upon

either spouse’s death.   In March 2002, petitioner paid the $5,000

as ordered by the PDL.
                                 - 3 -

     The original dissolution proceeding, Cause No. 01FC-7461,

was dismissed in July 2002 for reasons not relevant to the

instant action.     Petitioner himself then sought a dissolution of

the marriage in the Circuit Court of St. Louis County, Missouri

(Family Court Cause No. 02FC-7407, filed July 31, 2002) and an

Order dissolving the Deverses' marriage was entered on October

13, 2004.

     Petitioner claimed a deduction of $29,000 as alimony on his

2002 tax return.2    A notice of deficiency was mailed to

petitioner determining an income tax deficiency of $9,350.    After

further inquiry by respondent, it became clear that the $29,000

comprised $24,000 of maintenance paid to Ms. Devers and the

$5,000 paid to Mr. Dubin.    Before trial, respondent conceded the

deduction for the payments to Ms. Devers and recalculated

petitioner’s income tax deficiency to be $1,607.    Only the $1,607

deficiency corresponding to the $5,000 payment made to Mr. Dubin

remains at issue.

                              Discussion3

     Section 71(a) provides the general rule that alimony

payments are included in the gross income of the payee spouse;

section 215(a) provides the complementary general rule that


     2
        There is no disagreement that if the deduction were
proper, 2002 would be the appropriate tax year.
     3
        The issue for decision is essentially legal in nature;
accordingly, we decide it without regard to the burden of proof.
                              - 4 -

alimony payments are tax deductible by the payor spouse in “an

amount equal to the alimony or separate maintenance payments paid

during such individual’s taxable year.”

     Payments to a third party on behalf of a spouse and pursuant

to the terms of a divorce decree may be alimony if those payments

would otherwise qualify as such.   See sec. 1.71-1T(b), Q&A-6,

Temporary Income Tax Regs., 49 Fed. Reg. 34455 (Aug. 31, 1984).

The term “alimony” means any alimony as defined in section 71.

Section 71(b) 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
               includable in gross income * * * 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
                               - 5 -

                cash or property) as a substitute for
                such payments after the death of the
                payee spouse.

     Both parties agree that petitioner’s payment to Mr. Dubin

satisfies the requirements set out in section 71(b)(1)(A), (B),

and (C).   Payment was made in cash, made pursuant to a “divorce

or separation instrument” as described in section 71(b)(2)(C) and

corresponding regulations, see sec. 1.71-1(b)(3), Income Tax

Regs., and the payment was not ineligible for the section 71 and

215 deduction/inclusion scheme.   At the time of payment,

petitioner and Ms. Devers were not members of the same household.

Further, petitioner appears to be in agreement that the

obligation for someone to pay Mr. Dubin his fees would have

survived Ms. Devers’ death when he writes on page 7 of his

Memorandum Brief: “Aaron Dubin would be required to collect any

accrued legal fees from the estate of Ms. Devers by operation of

Missouri statute.”   The disagreement in this case is about

whether petitioner’s $5,000 payment satisfies section

71(b)(1)(D); i.e., whether petitioner’s own liability to pay

attorney’s fees as ordered by the PDL would have terminated in

the event of Ms. Devers’ death.   See sec. 1.71-1T(b), Q&A-10,

Temporary Income Tax Regs., supra at 34456.   Of course, an

inquiry of this kind necessitates exploring the fictional

question of whether or not an amount already paid would have

remained an amount to be paid had Ms. Devers predeceased
                               - 6 -

satisfaction of the obligation ordered by the PDL issued in the

first, inchoate marital dissolution proceeding.   To find an

answer, we must decide whether petitioner’s payment to Mr. Dubin

was pursuant to an obligation that would have been extinguished

by Ms. Devers’ death under either the terms of the PDL itself or

Missouri law.   See Altmann v. United States, 89 AFTR 2d 485, 490,

2002-1 USTC par. 50,275, at 83,614 (E.D. Mo. 2001).   Given that

the PDL is silent on the issue, we turn to State law.

     “Although Federal law controls in determining petitioner’s

income tax liability * * *, State law is necessarily implicated

in the inquiry inasmuch as the nature of petitioner’s liability

for the payment” was based in Missouri law.   Berry v.

Commissioner, T.C. Memo. 2000-373, affd. 36 Fed. Appx. 400 (10th

Cir. 2002); see also, e.g., Sampson v. Commissioner, 81 T.C. 614,

618 (1983), affd. without published opinion 829 F.2d 39 (6th Cir.

1987).   In Commissioner v. Estate of Bosch , 387 U.S. 456, 465

(1967), the Supreme Court addressed the means for determining

State law in the context of a Federal tax case and stated:

     the State’s highest court is the best authority on its
     own law. If there be no decision by that court then
     federal authorities must apply what they find to be the
     state law after giving “proper regard” to relevant
     rulings of other courts of the State. In this respect,
     it may be said to be, in effect, sitting as a state
     court.
                                - 7 -

       With no State decision squarely on point, the Court must do

its best to discern and apply what it believes to be Missouri

law.    Bernhardt v. Polygraphic Co., 350 U.S. 198 (1956).

1.   Missouri Family Law

       In Missouri, an award for attorney’s fees does not arise out

of the Missouri alimony provision.      In 1974, the State enacted

the Dissolution of Marriage Act, Mo. Ann. Stat. sections 452.300-

452.415 (West 2003).    Prior to that time, there was no express

statutory authority for awarding attorney’s fees, and such awards

were generally made under the auspices of the alimony provisions.

See, e.g., Rutlader v. Rutlader, 411 S.W.2d 826, 829 (Mo. Ct.

App. 1967); Knebel v. Knebel, 189 S.W.2d 464, 466 (Mo. Ct. App.

1945).    In enacting the Dissolution of Marriage Act, the State,

instead, provided for three separate and distinct awards in a

marriage dissolution proceeding:     (1) child support, (2)

maintenance (formerly referred to as alimony), and (3) attorney’s

fees.    See Mo. Ann. Stat. secs. 452.340, 452.335, 452.355 (West

2003).

       The separate treatment of maintenance and child
       support, as one type of an award, and litigation costs
       and attorney fees as another type of award,
       demonstrates a legislative intent not to continue the
       authority to award attorney fees as an incident to
       alimony or the present substitute for alimony which is
       designated as maintenance.


Dyche v. Dyche, 570 S.W.2d 293, 296 (Mo. 1978).      Alimony, unlike

other types of awards, is traditionally “considered to be
                                - 8 -

support-based and consequently would end upon the death of the

payee spouse.”   Altmann v. United States, 2002-1 89 AFTR 2d 2002-

485, at 2002-489, USTC par. 50,275, at 83,613.   In fact, the

obligation to provide maintenance specifically terminates upon

the death of either party.   See Mo. Ann. Stat. sec. 452.370.3 .

The obligation to pay child support also is subject to specific

termination provisions.   See, e.g., Mo. Ann. Stat. sec. 452.340.3

(West 2003) (obligation to pay child support terminates when

child dies or marries, etc.).   In contrast, there is no statutory

termination rule for an award of attorney’s fees, suggesting that

such an award would not terminate upon the death of either

spouse.   Caselaw also suggests that attorney’s fee awards would

not terminate upon the death of either spouse as such awards are

enforceable directly by the attorney.

     In Minor v. Minor, 901 S.W.2d 163 (Mo. Ct. App. 1995), an

attorney sought reversal of a lower court decision dismissing a

contempt suit against a husband who did not pay attorney’s fees

as ordered in a dissolution proceeding.   The Missouri Court of

Appeals held that a contempt action by the attorney against the

nonpaying husband was entirely appropriate.   According to Minor

and similarly decided caselaw, because the award of attorney’s

fees is an independent judgment, the attorney may bring a

contempt proceeding if the judgment is not satisfied; there is

nothing in the Missouri statutes or caselaw to suggest that this
                               - 9 -

ability would terminate upon the death of the person for whom

legal services had been rendered.4

2.   Validity of the Award

     Petitioner argues that a final Order of Dissolution would

have been required for the PDL to have any effect and that the

dismissal of the first dissolution proceeding removed the court’s

authority to order him to pay attorney’s fees.   We disagree.   It

is true that a court loses jurisdiction over a dissolution action

if one of the parties dies before the entry of a final Order.

See, e.g., Bilgere v. Bilgere, 128 S.W.3d 617 (Mo. Ct. App.

2004); Winters v. Cooper, 827 S.W.2d 233 (Mo. Ct. App. 1991);

Parkhurst v. Parkhurst, 799 S.W.2d 159, 161 (Mo. Ct. App. 1990).

But while a court may lose jurisdiction over the dissolution

action, collateral and other issues may remain properly before

the court.   See, e.g., Fischer v. Seibel, 733 S.W.2d 469 (Mo. Ct.

App. 1987) (reiterating that the parties are entitled to have

property rights decided even though one of the parties has died);

State ex rel. Weber v. McLaughlin, 157 S.W.2d 800 (Mo. Ct. App.

1942) (allowing the court to retain jurisdiction over an order to

a third party to return property despite the fact that the


     4
        Although there is caselaw suggesting that the obligation
to pay attorney’s fees not yet earned but awarded prospectively
on account would be subject to modification, see, e.g., Muegler
v. Muegler, 784 S.W.2d 839 (Mo. Ct. App. 1990), there are no
facts in this case that would suggest the $5,000 had not yet been
earned by Mr. Dubin at the time petitioner was ordered to pay
him.
                              - 10 -

husband had died and the dissolution action had abated).    We

believe a court would retain jurisdiction over an order to

enforce an award of attorney’s fees, even if Ms. Devers had died

prior to petitioner’s payment, and the court in the first

dissolution proceeding did not lose its authority to make the

order simply because the case did not result in a final marital

dissolution.

     In Johnson v. Johnson, 894 S.W.2d 245, 247 (Mo. Ct. App.

1995), the court wrote that an “order on a PDL * * * is a final

judgment disposing of the merits from which an appeal may be

taken.   * * * Such orders are in no way dependent on the merits

of the underlying dissolution suit.”   Though that case concerned

a PDL award of maintenance, the same court found in an earlier

case that the principle applied to attorney’s fees.   See Carlson

v. Aubuchon, 669 S.W.2d 294, 297 (Mo. Ct. App. 1984).   In fact,

“It is well established in Missouri that orders on motions to

allow * * * suit costs pendente lite are judgments in independent

proceedings.   They stand upon their own merits and are in no way

dependent on the merits of the underlying dissolution suit.”

Dardick v. Dardick, 661 S.W.2d 538, 540 (Mo. Ct. App. 1983); see

also Noll v. Noll, 286 S.W.2d 58, 62 (Mo. Ct. App. 1956).

Whether or not the case giving rise to the PDL ordering the

payment at issue ever culminated in an Order of Dissolution, the

award of attorney’s fees to Mr. Dubin was made on its own merits
                                 - 11 -

and, because petitioner did not appeal the award, the order was

enforceable in its own right.     “An order to pay attorney’s fees

is * * * more than a judgement for money; it is a personal order

to the spouse.”      Minor v. Minor, supra at 165-166.   Because the

order to pay Mr. Dubin was a personal order to petitioner, even

if Ms. Devers had predeceased payment, the order would still have

been valid, petitioner’s obligation to pay $5,000 would have

survived, and Mr. Dubin would have had his own cause of action to

collect directly from petitioner.     The fact that the case giving

rise to the PDL in discussion did not result in a final

dissolution of the marriage is irrelevant for the inquiry at

hand.

3.   Conclusion

      Although the Supreme Court of Missouri has not addressed the

narrow legal issue presented in the instant case, the State’s

statutory scheme of the child support, maintenance, and attorney

fee provisions, as well as relevant caselaw, suggests that

petitioner’s obligation to Mr. Dubin would not have terminated

had Ms. Devers died before satisfaction of the obligation whether

or not the PDL was ever followed by a Final Order and Decree of

Dissolution.      For that reason, and after considering all of the

facts and circumstances, we hold that petitioner’s deduction of

the $5,000 paid to Mr. Dubin was improper as it did not meet the

definition of “alimony” under section 71(b)(D).
                             - 12 -

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect our disposition of the disputed issue, as well as

respondent’s concessions,

                                        Decision will be entered

                                   for respondent in the amount

                                   of the reduced deficiency of

                                   $1,607.
