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Federal income tax purposes. However, that fact could be
relevant to our ultimate factual determination (in that it would
tend to show that petitioner and Carmen intended the payments to
terminate automatically at Carmen’s death) only if petitioner and
Carmen knew their intended tax treatment depended on the effect
of Carmen’s death on petitioner’s payment obligation.14
Petitioner has offered no evidence that would support a finding
of actual knowledge in that regard,15 and we deem it
inappropriate to impute such knowledge in this context.16 Cf.
14 We do not fail to recognize that, under the tax law in
effect prior to 1984, we treated a “tax intent” clause in the
divorce documents, providing that the payments would be fully
taxable to the payee, as relevant to the classification of the
payments for tax purposes. See Stevens v. Commissioner, T.C.
Memo. 1982-352, affd. 709 F.2d 12 (5th Cir. 1983).
15 Assuming, for the sake of argument, that knowledge of
petitioner’s and Carmen’s respective counsel could be ascribed to
petitioner and Carmen for these purposes, the record contains no
indication that their counsel knew the intended tax treatment
depended on the effect of Carmen’s death on petitioner’s payment
obligation.
16 If taxpayers could rely on mutually intended tax
consequences to establish an agreement satisfying sec.
71(b)(1)(D), then they could effectively “opt into” alimony
treatment, a result we believe is not supported by the statute.
See Geier, “Simplifying and Rationalizing the Federal Income Tax
Law Applicable to Transfers in Divorce”, 55 Tax Law. 363, 427
(2002) (while taxpayers can opt out of alimony treatment pursuant
to sec. 71(b)(1)(B), they have no power to opt into alimony
treatment under the statute); cf. Okerson v. Commissioner, 123
T.C. 258, 264-265 (2004) (rejecting the relevance of the State
court’s alleged intent that the payments at issue be deductible
as alimony).
We do not mean to suggest, however, that evidence of
intended tax consequences (and of tax reporting consistent with
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