18 T.C. 1020">*1020 The respondent determined an income tax deficiency against the petitioner for the year 1944 in the amount of $ 904.81. The sole question at issue is whether payments received by the petitioner under a separation agreement with her husband were made pursuant to a written instrument incident to a divorce decree. The 1952 U.S. Tax Ct. LEXIS 104">*105 respondent has conceded that only those payments received after entry of the divorce decree are in issue.

18 T.C. 1020">*1021 FINDINGS OF FACT.

Florence B. Moses, the petitioner, resides in Brooklyn, New York, and filed her income tax return for 1944 with the collector of internal revenue for the first district of New York. Petitioner and her former husband, Albert Moses, now deceased, were married in the State of New York on June 29, 1919. They lived together until October 12, 1943, when Albert Moses left the petitioner. On November 16, 1943, the petitioner instituted an action for a legal separation in the Supreme Court of New York for the County of Kings. Her husband appeared by attorney and filed an answer. Following the granting of a motion by petitioner for alimony pendente lite and counsel fees, the separation action came on for trial on March 8, 1944.

The proceedings were suspended while negotiations looking toward a voluntary separation agreement were carried on. During the discussions which followed, the petitioner declared that she would not give her husband a divorce. She refused to establish residence in another state and sue her husband for a divorce there. She stated1952 U.S. Tax Ct. LEXIS 104">*106 in answer to the suggestion that her husband would move to another state and there commence proceedings, that she would not give her husband a divorce under any circumstances. The parties then agreed that the matter of the divorce was out of consideration and that they would work out a voluntary agreement of separation. The trial of the separation action was then adjourned.

During the period of adjournment the petitioner was advised by her attorney that, if a decree and award of alimony were obtained by her, failure to make alimony payments could be punished by contempt proceedings but that such alimony payments would be taxable to her. She was also advised that if she entered into a voluntary separation agreement outside court the payments for support under the agreement could not be enforced through contempt proceedings but that such payments would not be taxable to her. The petitioner chose to enter into such a voluntary separation agreement. The parties executed a voluntary separation agreement on April 4, 1944, and the separation action in court was discontinued. Among the provisions of the separation agreement were the following:

1. From the date hereof, the parties may1952 U.S. Tax Ct. LEXIS 104">*107 and shall continue to live separate and apart for the rest of their natural lives, and each shall be free from interference, authority and control, direct or indirect, by the other as fully as if sole and unmarried. Neither one shall molest, disturb or harass the other. Neither one shall compel the other to live with him, or her, by any legal proceeding or otherwise. Each may, for his or her separate use or benefit, engage in any employment, business or profession which he or she may deem advisable.

2. The Husband shall, so long as he is alive, pay to the Wife, for her support and maintenance, the sum of $ 346.66 per month, on the 10th day of each and every month, commencing April, 1944, until her death or remarriage.

* * * *

18 T.C. 1020">*1022 14. In the event that the Wife shall remarry during the lifetime of the Husband, all her interest in the policies described in both "Schedule A" and "Schedule B" shall immediately cease, and she shall thereupon immediately reassign to the Husband the policies described in "Schedule A".

* * * *

21. The provisions of this agreement, to the extent that they may be acceptable to the court, may be incorporated in the final judgment or decree obtained1952 U.S. Tax Ct. LEXIS 104">*108 in any action hereafter brought by either party against the other for a divorce in any court of competent jurisdiction. Notwithstanding such incorporation, the provisions hereof shall not be merged in any such judgment or decree but shall, in all respects, survive the same.

At the time the separation agreement was executed, Albert Moses was president of the Almo Trading & Importing Co., Inc., a New York corporation doing business in New York. His income amounted to approximately $ 50,000 annually.

On or about September 14, 1944, Albert Moses instituted a divorce proceeding in the Circuit Court of the Eleventh Judicial Circuit in and for Dade County, Florida. Petitioner, in Brooklyn, New York, received a notification to appear in the suit. She was not personally served with process and she did not appear personally or by attorney in the Florida proceedings. On October 23, 1944, a final decree of divorce, a vinculo matrimonii, was granted to Albert Moses by the Florida court. The decree did not make provision for alimony or support nor did it refer to or incorporate the separation agreement between the parties. On October 23, 1944, Albert Moses married one Anna Price and 1952 U.S. Tax Ct. LEXIS 104">*109 lived in Brooklyn, New York, with his second wife until his death.

Albert Moses made payments under the voluntary separation agreement of $ 693.32 to the petitioner during the months of November and December, 1944, following the entry of the Florida divorce decree. The respondent determined that the amount of $ 2,773.28 paid to petitioner by Albert Moses in 1944 was taxable to her. By reason of respondent's concession, a lesser amount is now claimed.

The agreement for voluntary separation was not incident to the decree of divorce or of separate maintenance, and was not incident to such a divorce or legal separation.

OPINION.

The only issue is whether the payments received by petitioner from Albert Moses in November and December, 1944, were taxable to the petitioner under the provisions of section 22 (k) of the Internal Revenue Code. ¹ The Florida divorce decree 18 T.C. 1020">*1023 obtained by Albert Moses did not provide for alimony nor did it incorporate the provisions of the voluntary separation agreement. Thus, the payments received by petitioner were not imposed by a decree of divorce or separation. The New York separation action had been discontinued when the voluntary separation1952 U.S. Tax Ct. LEXIS 104">*110 was agreed upon. The only remaining basis for taxing petitioner is that the obligation to make the payments was imposed under a written instrument incident to a divorce or separation. It is contended by respondent that the voluntary agreement executed on April 4, 1944, is incident to the Florida divorce decree entered on October 23, of the same year. At the time the separation agreement was entered into and prior thereto, discussions pertaining to a divorce had occurred. Albert Moses wished to obtain a divorce as is evidenced by his proposals to petitioner regarding the institution of divorce proceedings. The petitioner rejected these suggestions and stated that she would not give her husband a divorce under any circumstances. She refused to sue him for divorce in New York or elsewhere or to consent to a divorce. Following this adamant stand by petitioner, Albert Moses agreed to a voluntary separation and the legal proceedings were discontinued.

1952 U.S. Tax Ct. LEXIS 104">*111 It is evident from the conduct of the parties that the voluntary agreement was not entered into as an incident to a divorce but as a substitute for a divorce or legal separation. The petitioner was advised by counsel as to his opinion of the consequences of the separation agreement and she accepted this alternative to a legal separation or divorce proceeding. The evidence points not to the conclusion that a divorce was contemplated by the parties entering into the agreement but rather that the voluntary separation agreement eliminated the issue of a divorce.

More than six months later Albert Moses instituted divorce proceedings in the State of Florida. Without entering into the question of the validity of this divorce we are of the firm opinion that the separation agreement of April 4, 1944, was not incident to the Florida divorce. The divorce decree obtained in Florida was the result of the action of Albert Moses. He wished to marry again but the discontinued proceedings brought by his wife for legal separation and the voluntary separation agreement entered into did not provide a status for remarriage. When a divorce was obtained in Florida, Albert Moses remarried the same 1952 U.S. Tax Ct. LEXIS 104">*112 day.

18 T.C. 1020">*1024 The evidence does not indicate that the parties entering into the agreement contemplated divorce proceedings as were true in Bertram G. Zilmer, 16 T.C. 365. If plans for a divorce following the agreement were held by Albert Moses, he did not bring them to light. The fact that one party may be considering the possibility of a divorce is not sufficient to make the voluntary separation agreement an incident to a divorce later obtained. Cecil A. Miller, 16 T.C. 1010. Although there is no requirement of positive proof that both parties jointly and positively anticipated legal divorce or separation at the moment they signed the agreement, Izrastzoff v. Commissioner, 193 F.2d 625, affirming Estate of Daniel G. Reid, 15 T.C. 573, the actions and conduct of the parties, the time between agreement and divorce proceedings, and the participation of the parties in obtaining a divorce are elements and factors to be considered.

Upon examination of the evidence, we are left with the conclusion that if a divorce had been made the consideration for entering1952 U.S. Tax Ct. LEXIS 104">*113 into the voluntary separation agreement, the petitioner would not have executed the agreement and would have continued the separation proceedings she had commenced. In this respect, the facts presented here differ from those of Robert Wood Johnson, 10 T.C. 647, wherein the taxpayer's wife assured him that she would institute a divorce suit if he would sign the agreement there in question. Upon the same basis, George T. Brady, 10 T.C. 1192, is distinguishable. The subject of a divorce was under discussion prior to the execution of the separation agreement but the result of that discussion was that the petitioner would not consent to a divorce. The provisions of the voluntary agreement were not adopted in the divorce proceedings to which petitioner was not a party. The voluntary separation agreement was not employed by the court granting the divorce in establishing the legal and economic relationships between the parties as was true in Lerner v. Commissioner, 195 F.2d 296.

The respondent contends that section 21 of the agreement demonstrates that both husband and wife contemplated1952 U.S. Tax Ct. LEXIS 104">*114 a divorce. That section declared that the provisions of the agreement may be incorporated in the final judgment or decree of divorce in any action brought by either party. This section also states that the provisions of the agreement shall survive any decree notwithstanding this incorporation. This provision clearly is concerned with the survival of the provisions of the separation agreement in the event that a divorce is obtained by either party. It makes provision against the merger of the terms of the agreement in that event. A provision for a contingency such as this in an agreement does not, without more, demonstrate that the agreement is incidental to the occurrence of an event which is no more than a possibility. It was possible that petitioner's husband might obtain a divorce decree despite her refusal 18 T.C. 1020">*1025 to be a party to such a proceeding. The possibility also existed that the petitioner might change her mind about a divorce. Similarly, we do not believe that either section 2 or section 14 of the agreement demonstrates the required relationship between the agreement and the later divorce. These provisions limit support payments and petitioner's interest in1952 U.S. Tax Ct. LEXIS 104">*115 insurance policies to the period in which she remains alive and does not remarry during her husband's lifetime. They do not indicate that a divorce is to come at a later date. These sections merely set forth the consequences if certain contingencies occur.

The facts presented here provide a much stronger basis for the conclusion that the agreement was not incident to the divorce than did the situation found in George J. Feinberg, 16 T.C. 1485, reversed Feinberg v. Commissioner, 198 F.2d 260, where we had reached the same conclusion. We believe the facts of the petitioner's positive refusal to consent to a divorce, the execution of the agreement in lieu of a divorce or legal separation, the discontinuance of the separation action, and the conduct of petitioner and her husband sufficiently distinguish the facts here present from the Feinberg case. The facts lead us to the conclusion that the agreement of April 4, 1944, was not incident to the Florida divorce decree of October 23, 1944. Any other decision would run counter to the clear weight of the evidence.

Decision will be entered under Rule 50.