T.C. Summary Opinion 2010-172

UNITED STATES TAX COURT

MICHAEL WALTER BRAGG, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 27942-09S. Filed December 13, 2010.

Michael Walter Bragg, pro se.

Melanie E. Senick, for respondent.

ARMEN, Special Trial Judge: This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect when the petition was filed.1 Pursuant to section

7463(b), the decision to be entered is not reviewable by any

1 Unless otherwise indicated, all subsequent section

references are to the Internal Revenue Code in effect for the

year in issue.
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other court, and this opinion shall not be treated as precedent

for any other case.

Respondent determined a deficiency in petitioner’s 2007

Federal income tax of $937.

The sole issue for decision is whether payments made by

petitioner in 2007 to his former wife are deductible as alimony

under section 215.

Background

Some of the facts have been stipulated, and they are so

found. We incorporate by reference the parties’ stipulation of

facts and accompanying exhibits. Petitioner resided in the State

of Washington when the petition was filed.

Petitioner and Rosalie Bragg (Ms. Bragg) were married in

approximately 1986. In April 2002, petitioner and Ms. Bragg were

divorced pursuant to a divorce decree approved by the Superior

Court of Washington, County of King. With respect to spousal

support the divorce decree states:

3.7 SPOUSAL MAINTENANCE

The husband shall pay $800.00 maintenance. Maintenance

shall be paid in $400 payments made twice monthly. The

first maintenance payment shall be due the first month

after this Decree is entered.

The husband shall pay $800 per month spousal maintenance to

the wife without a specific ending date due to the wife, at

present, being incapable of earning an adequate income. 

However, after five years from the date of this decree, the

husband’s obligation to pay said maintenance shall be

reviewable by motion to the court. In reviewing the

husband’s obligation to pay spousal maintenance, the court
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shall look at each parties [sic] income, assets, living

expenses, and any other factors showing the parties [sic]

respective financial situation(s). The burden of showing

why maintenance should be reduced or stopped altogether

shall be on the husband.

During 2007, petitioner paid Ms. Bragg a total of $6,240. 

Throughout 2007, petitioner had $240 from his biweekly paychecks

directly deposited into a checking account for the sole benefit

of Ms. Bragg. Although petitioner was required by the divorce

decree to pay to Ms. Bragg $400 twice monthly (for a total of

$9,600 yearly), petitioner and Ms. Bragg informally agreed to the

lesser amount of $240 due to petitioner’s financial

circumstances.2

At some point in 2006, Ms. Bragg remarried. Petitioner was

not aware of her remarriage until December 2007 when he was

informed of the remarriage by Ms. Bragg’s grandson. Upon

learning of Ms. Bragg’s remarriage, petitioner immediately

stopped the direct deposit into her account.

On his 2007 Federal income tax return petitioner claimed a

deduction of $6,240 for “alimony paid” to Ms. Bragg.

In a notice of deficiency respondent determined the payments

were not alimony and therefore disallowed the claimed deduction.

2 Petitioner explained at trial: “The changing of the

divorce decree would have cost us even more money to get done, so

we didn’t feel it was necessary.”
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Discussion

Section 215(a) allows a deduction for alimony payments paid

during the payor’s taxable year. Section 215(b) defines alimony

or separate maintenance as any “payment (as defined in section

71(b)) which is includible in the gross income of the recipient

under section 71.” Section 71(b) provides a four-step inquiry

for determining whether a cash payment is alimony. Section 71(b)

provides:

SEC. 71(b). Alimony or Separate Maintenance

Payments Defined.--For purposes of this section–-

(1) In general.--The term “alimony or

separate maintenance payment” means any payment in

cash if–-

(A) such payment is received by (or on

behalf of) a spouse under a divorce or

separation instrument,

(B) the divorce or separation instrument

does not designate such payment as a payment

which is not includible in gross income * * *

and not allowable as a deduction under

section 215,

(C) in the case of an individual legally

separated from his spouse under a decree of

divorce or of separate maintenance, the payee

spouse and the payor spouse are not members

of the same household at the time such

payment is made, and

(D) there is no liability to make any

such payment for any period after the death

of the payee spouse and there is no liability

to make any payment (in cash or property) as

a substitute for such payments after the

death of the payee spouse.
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Payments are deductible as alimony only if all four requirements

of section 71(b)(1) are met.

Both parties agree that petitioner’s payments to Ms. Bragg

satisfied the requirements set out in section 71(b)(1)(B), (C),

and (D).3 The parties do not agree, however, on whether the

payments satisfy the requirement that the payments be made under

a divorce or separation instrument. See sec. 71(b)(1)(A).

Section 71(b)(2) provides that a “divorce or separation

instrument” means:

(A) a decree of divorce or separate

maintenance or a written instrument incident

to such a decree,

(B) a written separation agreement, or

(C) a decree (not described in

subparagraph (A)) requiring a spouse to make

payments for the support or maintenance of

the other spouse.

As a general matter, if the language of a statute is

unambiguous on its face, we apply the statute in accordance with

its terms. See, e.g., Garber Indus. Holding Co. v. Commissioner,

124 T.C. 1, 5 (2005), affd. 435 F.3d 555 (5th Cir. 2006). 

Section 71 is not a tremendously complicated statute, and its

requirements are clearly set forth. Petitioner made the payments

3 The requirement under sec. 71(b)(1)(D) that there be no

obligation to make payments after the death of the payee spouse

is satisfied by operation of Washington State law under Wash.

Rev. Code Ann. sec. 26.09.170(2) (West 2005) discussed infra.
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to Ms. Bragg pursuant to a divorce decree, which is listed as a

“divorce or separation instrument” in section 71(b)(2)(A).

Despite the fact that petitioner falls within the provisions

of the applicable Federal statute, respondent argues that because

Ms. Bragg remarried in 2006, petitioner’s legal obligation to pay

spousal maintenance terminated as a matter of Washington State

law; thus, respondent contends that the payments were not

received under a divorce instrument as required by section

71(b)(1)(A).4 

Wash. Rev. Code Ann. sec. 26.09.170(2) (West 2005) provides: 

“Unless otherwise agreed in writing or expressly provided in the

decree the obligation to pay future maintenance is terminated

upon the death of either party or the remarriage of the party

receiving maintenance.” But there is no requirement in section

71(b)(1)(A) that payments be made under a legally enforceable

duty in order to qualify for the alimony deduction. The only

requirement is that any payment be “received by (or on behalf of)

a spouse under a divorce or separation instrument.” Sec.

71(b)(1)(A). Although it was once the case that entitlement to

an alimony deduction under section 71 required payments to be

4 Respondent does not allege that the payments at issue

were disguised child support payments or installments of a

property distribution; rather, his sole argument is that

petitioner’s payments to his ex-wife did not constitute alimony

because they did not meet the definition under the statute as a

result of the operation of Washington State law.
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made under a legally enforceable obligation, it has not been so

for more than 25 years.

Before the Deficit Reduction Act of 1984, Pub. L. 98-369,

sec. 422(a), 98 Stat. 795, section 71(a)(1) of the Internal

Revenue Code of 1954 defined alimony as payments made “in

discharge of * * * a legal obligation which, because of the

marital or family relationship, is imposed on or incurred by the

husband under the [divorce] decree or under a written instrument

incident to * * * divorce or separation.” The statute was

amended in 1984, repealing the “requirement that the payment be

based on a legal support obligation”. H. Rept. 98-432 (Part 2),

at 1069 (1984).

Respondent’s legal argument has as its foundation old law

and does not reflect amendments to the statute. Although there

certainly have been cases holding that voluntary payments made

outside a written instrument incident to divorce are not alimony,

those cases have generally dealt with situations where there was

no proper divorce decree or separation agreement, where a payment

was made before the operative document went into effect, or where

the older version of section 71 applied to the particular case. 

See, e.g., Herring v. Commissioner, 66 T.C. 308, 311 (1976)

(holding that payments made under an oral agreement were not

alimony because they were made before the issuance of the divorce

decree); Taylor v. Commissioner, 55 T.C. 1134, 1140 (1971)
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(applying the old version of section 71 and concluding that,

“absent some sort of currently enforceable judicial decree or

order”, section 71 would not apply); Leventhal v. Commissioner,

T.C. Memo. 2000-92 (stating that letters from one spouse’s

attorney to another do not constitute a divorce or separation

instrument); Peterson v. Commissioner, T.C. Memo. 1998-27

(confirming that a California State court’s issuance of a Minute

Order was sufficient under State law to constitute a “divorce or

separation instrument”); Abood v. Commissioner, T.C. Memo. 1990-

453 (applying the pre-amendment version of section 71 to the

facts and clarifying that, under those circumstances, “voluntary

payments are not within the purview of sections 71 and 215”). 

This is true even of recent cases. See, e.g., Johnson v.

Commissioner, 441 F.3d 845, 850 (9th Cir. 2006) (affirming the

Tax Court’s holding that the prior version of section 71

applied). There have been no cases firmly on point with the one

at bar.

Respondent’s own regulations do not support his position. 

Although section 1.71-1, Income Tax Regs., contains the

antiquated language reflective of the older version of the

alimony statute, see sec. 1.71-1(b), Income Tax Regs. (“Such

periodic payments must be made in discharge of a legal obligation

imposed upon or incurred by the husband because of the marital or

family relationship”), the temporary regulation promulgated along
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with the amended version of section 71 in 1984 reflects the

changes to the statutory language.5 The more recent regulation

requires only that alimony payments meet the following

requirements: (a) That payments be made in cash; (b) that

payments not be designated as excludable from the gross income of

the payee and nondeductible by the payor; (c) that payments be

made between spouses who are not members of the same household;

(d) that the payor has no liability to continue to make payments

after the death of the payee spouse; and (e) that payments are

not treated as child support. Sec. 1.71-1T(a), Q&A-2, Temporary

Income Tax Regs., 49 Fed. Reg. 34455 (Aug. 31, 1984). Further,

section 1.71-1T(a), Q&A-3, Temporary Income Tax Regs., 49 Fed.

Reg. 34455 (Aug. 31, 1984), makes very clear that “the

[requirement] that alimony or separate maintenance payments be

* * * made in discharge of a legal obligation * * * [has] been

eliminated.” Accordingly, petitioner’s 2007 payments satisfy the

requirements for alimony payments as outlined in the relevant

regulations.

More than 25 years after the enactment of the amended

statute, there is no reason to assume that Congress meant

anything other than what it said in enacting the present version

5 Temporary regulations are entitled to the same weight as

final regulations. See Peterson Marital Trust v. Commissioner,

102 T.C. 790, 797 (1994), affd. 78 F.3d 795 (2d Cir. 1996); Truck

& Equip. Corp. v. Commissioner, 98 T.C. 141, 149 (1992).
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of section 71. It is not the Court’s place to support

respondent’s attempt to include language Congress itself did not.

Accordingly, we hold that, under the unique facts of this

case, petitioner’s payments made to his former wife in 2007

satisfied the conditions set forth in section 71 and were thus

properly deductible as alimony under section 215 for that taxable

year.

Conclusion

We have considered all of the arguments made by respondent,

and, to the extent that we have not specifically addressed them,

we find them to be moot, irrelevant, or without merit.

To reflect the foregoing,

Decision will be entered

for petitioner.