1982 Tax Ct. Memo LEXIS 409">*409 H and W were divorced in 1975. Under the divorce decree, W was awarded custody of their three minor children, and H was required to make monthly payments to W for the support of W and such children. Such payments were to be reduced by one-third as each child reached majority or otherwise was no longer required to be supported. W remarried in 1975, and H continued to make such payments.
MEMORANDUM FINDINGS OF FACT AND OPINION
SIMPSON,
FINDINGS OF FACT
Some of the facts have been stipulated, and those facts are so found.
The petitioners, Lee Swink and Saress Dawson Henry, husband and wife, resided in Marietta, Ga., at the time they filed their petition in this case. They filed their joint Federal income tax return for 1977 with the Internal Revenue Service Center, Chamblee, Ga.
The petitioners, Thomas G. and June G. Strealdorf, husband and wife, resided in Douglasville, Ga., at the time they filed their petition in this case. They timely filed their joint Federal income tax return for 1977 with the Internal Revenue Service Center, Chamblee, Ga.
Prior to 1975, Mr. Strealdorf married Saress Dawson (now Mrs. Henry). Three children were born of such marriage:
Name | Date of Birth |
James Dawson Strealdorf | July 31, 1962 |
Thomas George Strealdorf, Jr. | Oct. 14, 1963 |
Sue Ann Strealdorf | Nov. 18, 1965 |
In June 1975, a final judgment and decree dissolving such marriage was entered by the Superior Court of Cobb County, Ga. Such decree awarded custody of the three children to Mrs. 1982 Tax Ct. Memo LEXIS 409">*412 Henry and further provided, in part:
the defendant [Mr. Strealdorf] shall pay, or cause to be paid, to the plaintiff [Mrs. Henry], the sum of Five Hundred and Fifty-five Dollars ($555.00) per month as alimony and child support, for the support of herself and the said three minor children. Said payments are to be reduced by one-third as each child dies, marries, reaches age 18, or becomes sooner self-supporting. If, however, the individual child enrolls full-time in a post secondary school or college, said support payments will continue until completion of a regular program.
Neither Mr. Strealdorf nor Mrs. Henry ever discussed the tax consequences of such payments.
In October 1975, Mrs. Henry married Mr. Henry. In approximately November 1975, Mr. Strealdorf learned of the remarriage of his former wife. He continued making payments pursuant to the divorce decree. However, during June, July, and August 1976, he made payments of only $300 per month to Mrs. Henry. Mr. Strealdorf's reason for making such reduced payments was that he had insufficient funds due to the payment of large dental expenses for his children. In August 1976, Mrs. Henry instituted a court proceeding1982 Tax Ct. Memo LEXIS 409">*413 against Mr. Strealdorf in which she requested that he be held in contempt for failure to make the full amount of the monthly payments for June through August. In September 1976, the Superior Court of Cobb County, Ga., dismissed such proceeding since Mr. Strealdorf had paid such arrearage. In its order, the Superior Court characterized such payment as "unpaid child support."
During the period January through November 1977, Mr. Strealdorf paid to Mrs. Henry the amount of $555 per month. In November 1977, Mrs. Henry and Mr. Strealdorf entered into an agreement whereby the custody of their oldest child, James, was transferred from Mrs. Henry to Mr. Strealdorf. Such agreement further provided that:
the child support payments made to Saress D. Henry by Thomas G. Strealdorf are to be reduced by one third, from $555.00 per month to $370.00 per month, unless and until said James D. Strealdorf returns to the custody of his mother, when the amount shall revert to $555.00 per month, as per the original court order and judgment.
In December 1977, pursuant to such agreement, Mr. Strealdorf paid $370 to Mrs. Henry. Thus, during 1977, Mr. Strealdorf paid the total sum of $6,475 to Mrs. 1982 Tax Ct. Memo LEXIS 409">*414 Henry.
On their return for 1977, Mr. and Mrs. Strealdorf deducted as alimony payments the $6,475 paid to Mrs. Henry. On their return for 1977, Mr. and Mrs. Henry did not include such payments in their gross income. In his notices of deficiency, the Commissioner disallowed the deduction claimed by Mr. and Mrs. Strealdorf and determined that such payments constituted alimony, includable in the gross income of Mr. and Mrs. Henry.
OPINION
The issue for decisionis whether the amounts paid during 1977 by Mr. Strealdorf to his former wife, Mrs. Henry, constitute alimony, deductible by him and includable in her gross income, or whether such payments constitute child support, neither deductible by him nor includable in her gross income. The Commissioner, for protective reasons, has taken inconsistent positions in his notices of deficiency. However, at trial and on brief, it is his position that such payments are alimony.
1982 Tax Ct. Memo LEXIS 409">*416 The parties agree that if only the divorce decree were involved, the full amount of the payments would be alimony, since such payments were periodic and there was no specific designation of the amount or percentage of such payments which was for the support of the minor children. See
Generally, the applicability of
1982 Tax Ct. Memo LEXIS 409">*418 Under Georgia law, the duty of a father to provide support and maintenance for his minor children does not cease upon the remarriage of his former wife.
All obligations for permanent alimony to the wife, whether created by contract, verdict, judgment, or decree, the time for performance of which has not yet arrived,
1982 Tax Ct. Memo LEXIS 409">*419 It is well settled in the Georgia cases interpreting such statute, and the parties do not contend otherwise, that a husband's legal obligation to pay alimony automatically terminates upon the remarriage of his former wife unless otherwise provided in the decree.
In
In
More significant in deciding the present case is the case of
"* * * as alimony and child support the sum $650of.00 per month for her support and maintenance and for the support, maintenance and educationof the minor child. Upon the minor child's 18th birthday or his death, marriage or if he should otherwise become self-supporting, the aforesaid payments, shall be reduced by a sum of $250.00 per month." [
The trial court found, and the Supreme Court of Georgia affirmed, that the husband's obligation was abated by the sum of $400 per month upon his former wife's remarriage. The court reasoned that if any of the conditions applicable to the child occurred, the former wife would continue to be entitled to receive alimony of $400 per month. The Supreme Court of Georgia held that it was not necessary for1982 Tax Ct. Memo LEXIS 409">*422 the agreement to expressly provide that alimony for the wife should cease upon her remarriage because Georgia
The decree dissolving the marriage of Mr. Strealdorf and Mrs. Henry provided that the $555-per-month payments were for alimony and child support and that such payments were to be reduced by one-third as each of their three children reached majority or otherwise was no longer required to be supported. There was no expressed indication that such payments should end or continue in the event of the remarriage of Mrs. Henry; yet, under
To reflect the foregoing and the Commissioner's determination that James was a dependent of the Henry's during 1977,
1. All statutory references are to the Internal Revenue Code of 1954 as in effect during the years in issue, unless otherwise indicated.↩
2. In some situations, the treatment of periodic payments as alimony under
3. Such section was amended in 1979. As so amended, it provided, in relevant part:
All obligations for permanent alimony to a party, whether created by contract, verdict, judgment, or decree, the time for performance of which has not arrived, shall cease upon remarriage of the party to whom such obligations are owed unless otherwise provided.
Such section was again amended in 1981, effective as of April 7, 1981. As so amended, paragraph (b) of such section is substantially identical to the language of the 1979 amendment. Ga. Code Ann. (Supp. 1981).↩