PURSUANT TO
Decision will be entered for petitioner.
ARMEN,
Respondent determined a deficiency in petitioner's 2007 Federal income tax of $937.
The sole issue for decision is whether payments made by petitioner in 2007 to his former wife are deductible as alimony under
Some of the facts have been stipulated, and they are so found. We incorporate by reference the parties' stipulation of facts and accompanying exhibits. Petitioner resided in the State of Washington when the petition was filed.
Petitioner and Rosalie Bragg (Ms. Bragg) were married in approximately 1986. In April 2002, petitioner and Ms. Bragg were divorced pursuant to a divorce decree 2010 Tax Ct. Summary LEXIS 192">*193 approved by the Superior Court of Washington, County of King. With respect to spousal support the divorce decree states:
3.7 SPOUSAL MAINTENANCE
The husband shall pay $800.00 maintenance. Maintenance shall be paid in $400 payments made twice monthly. The first maintenance payment shall be due the first month after this Decree is entered.
The husband shall pay $800 per month spousal maintenance to the wife without a specific ending date due to the wife, at present, being incapable of earning an adequate income. However, after five years from the date of this decree, the husband's obligation to pay said maintenance shall be reviewable by motion to the court. In reviewing the husband's obligation to pay spousal maintenance, the court shall look at each parties [sic] income, assets, living expenses, and any other factors showing the parties [sic] respective financial situation(s). The burden of showing why maintenance should be reduced or stopped altogether shall be on the husband.
During 2007, petitioner paid Ms. Bragg a total of $6,240. Throughout 2007, petitioner had $240 from his biweekly paychecks directly deposited into a checking account for the sole benefit of Ms. Bragg. Although petitioner 2010 Tax Ct. Summary LEXIS 192">*194 was required by the divorce decree to pay to Ms. Bragg $400 twice monthly (for a total of $9,600 yearly), petitioner and Ms. Bragg informally agreed to the lesser amount of $240 due to petitioner's financial circumstances.2
At some point in 2006, Ms. Bragg remarried. Petitioner was not aware of her remarriage until December 2007 when he was informed of the remarriage by Ms. Bragg's grandson. Upon learning of Ms. Bragg's remarriage, petitioner immediately stopped the direct deposit into her account.
On his 2007 Federal income tax return petitioner claimed a deduction of $6,240 for "alimony paid" to Ms. Bragg.
In a notice of deficiency respondent determined the payments were not alimony and therefore disallowed the claimed deduction.
(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 * * * and not allowable as a deduction under
(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.
Payments are deductible as alimony only if all four requirements of
Both parties agree that petitioner's payments to Ms. Bragg satisfied the requirements 2010 Tax Ct. Summary LEXIS 192">*196 set out in
(A) a decree of divorce or separate maintenance or a written instrument incident to such a decree,
(B) a written separation agreement, or
(C) a decree (not described in subparagraph (A)) requiring a spouse to make payments for the support or maintenance of the other spouse.
As a general matter, if the language of a statute is unambiguous on its face, we apply the statute in accordance with its terms. See, e.g.,
Despite the fact that petitioner falls within the provisions of the applicable Federal statute, respondent argues that because Ms. Bragg remarried in 2006, petitioner's legal obligation to pay spousal maintenance terminated as a matter of Washington State law; thus, respondent contends that the payments were not received under a divorce instrument as required by
Before the Deficit Reduction Act of 1984, Pub. L. 98-369, sec. 422(a), 98 Stat. 795,
Respondent's legal argument has as its foundation old law and does not reflect amendments to the statute. Although there certainly have been cases holding that voluntary payments made outside a written instrument incident to divorce are 2010 Tax Ct. Summary LEXIS 192">*199 not alimony, those cases have generally dealt with situations where there was no proper divorce decree or separation agreement, where a payment was made before the operative document went into effect, or where the older version of
Respondent's own regulations do not support his position. Although
More than 25 years after the enactment of the amended statute, there is no reason to assume that Congress meant anything other than what it said in enacting the present version of
Accordingly, we hold that, under the unique facts of this case, 2010 Tax Ct. Summary LEXIS 192">*202 petitioner's payments made to his former wife in 2007 satisfied the conditions set forth in
We have considered all of the arguments made by respondent, and, to the extent that we have not specifically addressed them, we find them to be moot, irrelevant, or without merit.
To reflect the foregoing,
1. Unless otherwise indicated, all subsequent section references are to the Internal Revenue Code in effect for the year in issue.↩
2. Petitioner explained at trial: "The changing of the divorce decree would have cost us even more money to get done, so we didn't feel it was necessary."↩
3. The requirement under
4. Respondent does not allege that the payments at issue were disguised child support payments or installments of a property distribution; rather, his sole argument is that petitioner's payments to his ex-wife did not constitute alimony because they did not meet the definition under the statute as a result of the operation of Washington State law.↩
5. Temporary regulations are entitled to the same weight as final regulations. See