- 8 - 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.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011