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for the continuation of payments ostensibly terminating at that
time depends on all of the facts and circumstances).
2. Okerson v. Commissioner
Our recent opinion in Okerson v. Commissioner, 123 T.C. 258
(2004), nicely illustrates the operation of the substitute
payment clause of section 71(b)(1)(D). The divorce decree in
that case required Mr. Okerson to pay Mrs. Okerson $117,000 “as
alimony necessary for her support” in varying installments over a
period of approximately 10 years. Id. at 259-260. Although the
decree specified that “[s]aid alimony” would terminate upon Mrs.
Okerson’s death, another provision obligated Mr. Okerson to pay
the remaining installments in that event “for or on behalf of the
education of the parties’ two children”. Id. at 260. A
subsequent decree required Mr. Okerson to pay Mrs. Okerson’s
attorney $33,500 on Mrs. Okerson’s behalf “as alimony necessary
for her support” over a period of 41 months. Id. That decree
similarly provided that “[s]aid alimony” would terminate upon
Mrs. Okerson’s death, in which case the remaining installments
would be payable directly to her attorney. Id. at 260-261. We
concluded that both postdeath obligations were substitute payment
liabilities, as contemplated in section 71(b)(1)(D), with respect
to the payments to Mrs. Okerson labeled as “alimony” and that,
consequently, the payments to Mrs. Okerson failed to qualify as
deductible alimony. Id. at 267-268; see also sec. 1.71-1T(b),
Q&A-14, Examples (1) and (2), Temporary Income Tax Regs., supra.
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