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It does appear that the divorce court gave Kim control of the
escrow account so that she could use the interest. The property
settlement provided:
IT IS FURTHER ORDERED AND ADJUDGED that the escrow
fund established for the payment of the Federal and
State capital gains tax on the marital home in the
amount of Sixty-Two Thousand ($62,000.00) Dollars
[subsequently reduced to $54,000.00] shall be under the
exclusive control of the Plaintiff, who shall be
entitled to the interest thereon until the date the tax
is paid which interest shall be applied towards [sic]
Plaintiff's alimony as provided for in the Alimony
paragraph of this Judgment.
This arrangement also benefited petitioner, since it lessened his
overall alimony obligation.
Petitioner also argues that since the divorce decree
allocates responsibility for paying the tax to his ex-wife, he
cannot be held liable for tax. To the contrary, petitioner "can
not divest [himself] of liability for tax by execution of a
contract to which the United States is not a party." Humbert v.
Commissioner, 24 B.T.A. 828, 829 (1931); Neeman v. Commissioner,
13 T.C. 397, 399 (1949), affd. 200 F.2d 560 (2d Cir. 1952).
We conclude that the Commissioner was correct in the
deficiency notice in attributing 50 percent of the gain to
petitioner. However, since the Government on brief, in ill-
advised reliance upon a misunderstanding of Friscone, has reduced
its claim to tax from 50 percent to 25 percent of the gain, it
must take the consequences of that latter position. Accordingly,
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