- 8 -
property settlement, and as such, the payments do not give rise
to an alimony deduction.5
Section 7491(a) provides that the burden of proof shifts to
respondent under certain specified conditions. Petitioner has
not established that the burden of proof has shifted, and in any
event, the resolution of the issue of the nature of the payments
in question does not depend upon who has the burden of proof.
Alimony or separate maintenance payments generally are
deductible by the payor spouse. Sec. 215. Alimony or separate
maintenance payments are defined by section 71(b), which provides
in part:
SEC. 71(b) Alimony or Separate Maintenance
Payments Defined.--For purposes of this section--
(1) In general.--The term “alimony or
separate maintenance payment” means any
payment in cash if--
4(...continued)
separate tax withholding for payments to Ms. Warriner.
5 Respondent argues that a property settlement was
“clearly intended by the divorce court”. The intended purpose
behind the payments is not controlling. Nelson v. Commissioner,
T.C. Memo. 1998-268. Further, “labels attached to payments
mandated by a decree of divorce or marriage settlement agreement
are not controlling”. Benedict v. Commissioner, 82 T.C. 573, 577
(1984). A payment must satisfy all the requirements of sec.
71(b) to qualify as alimony. See Jaffe v. Commissioner, T.C.
Memo. 1999-196. Congress amended sec. 71 in the Deficit
Reduction Act of 1984, Pub. L. 98-369, sec. 422(a), 98 Stat. 494.
The purpose behind the amendment was to “eliminate the subjective
inquiries into intent and the nature of payments that had plagued
the courts in favor of a simpler, more objective test.” Hoover
v. Commissioner, 102 F.3d 842, 845 (6th Cir. 1996), affg. T.C.
Memo. 1995-183.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011