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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 as
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