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Discussion5
The issue before the Court is the proper characterization of
the $15,600 of petitioner’s military retirement pension paid to
Ms. Warriner during tax year 1999.6 Petitioner argues these
payments constitute deductible alimony, and respondent claims
these payments constitute a division of marital property.
Petitioner maintains the payments represent alimony because
the Bankruptcy court and the Defense Finance and Accounting
Service classified the payments as such. Respondent maintains
that the payments represent a property settlement, and, as such,
the payments do not give rise to an alimony deduction.
Respondent argues that a property settlement was intended by the
divorce court. However, 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). Finally, it
is well settled that State courts by their decisions cannot
5We decide the issue in this case without regard to the
burden of proof. Accordingly, we need not decide whether the
general rule of sec. 7491(a)(1) is applicable in this case. See
Higbee v. Commissioner, 116 T.C. 438 (2001).
6As stated previously, this issue, pertaining to
petitioner’s taxable year 1996, has already been before this
Court. Therefore, it appears that the doctrine of collateral
estoppel might apply to this case; however, respondent has not
raised the affirmative defense and as such is not at issue in the
present case. See Rule 39.
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