- -5 petitioner is to pay a certain number of payments for a specific length of time. It is clear that section 8 imposes liability on petitioner for a period after the death of the payee spouse. Petitioner contends that the language in Exhibit "A" of the settlement agreement, which states the payments are reportable by petitioner's former wife and deductible by petitioner, makes the settlement agreement ambiguous, and, thus, parol evidence should be examined to determine the intent of the parties. We are not persuaded by petitioner's argument. It is clear that the requirement under section 71(b)(1)(D) was not satisfied in this case. Whether or not the parties intended for the payments to be deductible to petitioner, we must focus on the legal effect of the agreement in determining whether the payments meet the criteria under section 71. Since section 71(b)(1)(D) is not met, the payments are not considered alimony for Federal income tax purposes. As we stated in Webb v. Commissioner, T.C. Memo. 1990-540, the current section 71 was enacted to prevent the type of litigation now before us. The House committee stated the purpose of the current section 71 as follows: The committee believes that a uniform Federal standard should be set forth to determine what constitutes alimony for Federal tax purposes. This will make it easier for the Internal Revenue Service, the parties to a divorce, and the courts to apply the rules to the facts in any particular case and should lead to less litigation. The committee bill attempts to define alimony in a way that would conform to general notions of what type of payments constitute alimony asPage: Previous 1 2 3 4 5 6 7 8 9 Next
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