Michael K. Berry - Page 19

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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             
                                                             (continued...)           




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