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deduction of the claimed alimony payments to Frances Ryan was
disallowed.
In this case, respondent's position was based on the
uncertainty associated with what effect, if any, the court of
appeals' opinion had on the alimony provisions contained in the
Judgment of Divorce. If the court of appeals' opinion eliminated
the termination-upon-death provision contained in the Judgment of
Divorce, the payments made by petitioner to Frances Ryan may not
have qualified as alimony under State law, and may not have been
deductible. If the court of appeals' opinion did not alter the
termination-upon-death provision contained in the Judgment of
Divorce, the payments would be considered alimony and would have
been deductible under section 215. This was ultimately a matter
of legal interpretation.
Under these circumstances, we find that respondent acted
reasonably in raising the issue of what effect, if any, the court
of appeals' opinion had on the alimony provisions contained in
the Judgment of Divorce. The Judgment of Divorce had not been
modified to reflect the changes mandated by the court of appeals'
decision. The absence of a corrected Judgment of Divorce,
coupled with Frances Ryan's position on her tax return, left the
terms of the payment provisions open to interpretation. We
addressed the effect of the court of appeals' opinion in Ryan v.
Commissioner, supra, and ultimately rejected the position on this
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