Joyce A. Perkins - Page 4




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          Perkins.3  On March 13, 2006, respondent issued a notice of                 
          deficiency.  Petitioner then filed a timely petition with this              
          Court.  A trial was held on March 7, 2007, in Knoxville,                    
          Tennessee.                                                                  
                                       OPINION                                        
          I.  Taxability of the $26,400 in Disability Benefits Received by            
               Petitioner Pursuant to Paragraph 14(f) of the MDA                      
               As a general rule, the Commissioner’s determination of a               
          taxpayer’s liability for an income tax deficiency is presumed               
          correct, and the taxpayer bears the burden of proving that the              
          determination is improper.  See Rule 142(a); Welch v. Helvering,            
          290 U.S. 111, 115 (1933).  But see sec. 7491(a).                            
               “Payments incident to a divorce traditionally fell into one            
          of two categories for [the purpose of] Federal tax law: property            
          settlements or alimony.”  Rogers v. Commissioner, T.C. Memo.                
          2005-50.  Payments characterized as property settlements are                
          generally neither deductible from the income of the payor nor               
          includable in the income of the payee.  See Yoakum v.                       
          Commissioner, 82 T.C. 128, 134 (1984).  The opposite is true for            
          payments characterized as alimony.  See sec. 215(a) (“In the case           
          of an individual, there shall be allowed as a deduction an amount           
          equal to the alimony or separate maintenance payments paid during           
          such individual’s taxable year.”); sec. 71(a) (“Gross income                


               3  That return was prepared by John P. Konvalinka, the                 
          attorney representing petitioner in this case.                              





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