T.C. Summary Opinion 2011-18

UNITED STATES TAX COURT

ERIC S. KNOEDLER, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 27181-09S. Filed February 28, 2011.

Eric S. Knoedler, pro se.

Thomas D. Yang, for respondent.

LARO, 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 other court, and this

opinion shall not be treated as precedent for any other case.

1Subsequent section references are to the applicable

versions of the Internal Revenue Code, and Rule references are to

the Tax Court Rules of Practice and Procedure.
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This case is before the Court for decision without trial. 

See Rule 122. Petitioner petitioned the Court to redetermine

respondent’s determination of a $2,993 deficiency in his 2007

Federal income tax. We decide whether petitioner may deduct as

alimony $12,000 he paid pursuant to his divorce from his former

wife. We hold that petitioner may not deduct any of that amount. 

Background

All facts were stipulated or contained in the exhibits

submitted with the parties’ stipulation of facts. Those

stipulated facts and exhibits are incorporated by this reference

and are so found. Petitioner resided in Illinois when the

petition was filed. 

Petitioner married Mary Vogt-Knoedler (Ms. Vogt-Knoedler) in

1980, and they had two children: J.K., born in 1985, and S.K.,

born in 1987 (collectively, children). In 2000 Ms. Vogt-Knoedler

commenced a divorce action in the Court of Common Pleas of Monroe

County, Pennsylvania (State court). Petitioner and Ms. VogtKnoedler entered into a postnuptial agreement (agreement) on

November 5, 2000. The agreement provided: 

5. HUSBAND’S SUPPORT OF FAMILY: Husband agrees

that Wife is the primary custodian for the children. 

Prior to the graduation of * * * [S.K.] from high

school * * * Husband shall provide funds in the amount

of $2,000.00 per month for Wife’s use for her care of

the children and her own personal expenses. * * *

Should Wife either remarry or cohabitate with someone

of the opposite sex for more than one month, then Wife

agrees to deposit 1⁄2 of the monthly $2,000.00 family
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support payment into a separate bank account in trust

for the children’s college education. 

Following * * * [S.K.]’s graduation * * * the

support amount shall be adjusted to $1,000.00 per month

per child in college. Further Husband shall only be

responsible for 4 years of college education per child;

this obligation will terminate upon either child’s

decision to withdraw from one full year of college

(i.e., withdrawal from two concurrent semesters of

college). 

* * * * * * * 

(14) SURVIVAL OF THIS AGREEMENT: The parties

agree * * * that this Agreement shall be incorporated

into any divorce decree subsequently entered by any

court of competent jurisdiction pursuant to any divorce

proceedings that have been instituted by the parties. 

The * * * [State court], upon entry of judgment for

divorce, shall retain the right to enforce the

provisions and terms of this Agreement. This

Agreement, however, is not modifiable by the * * *

[State court], it being the interest of the parties

hereto that this Agreement shall not merge into such a

subsequent decree of divorce, but shall survive the

entry of any such decree and be forever binding and

conclusive on the parties. 

The State court finalized the divorce by decree on March 22,

2002. On October 8, 2002, petitioner moved the State court to

allocate the $2,000 per month paid for “family support” as

spousal support and/or child support. In granting petitioner’s

motion, the State court opined that 

Although the Agreement specifies the amount of

“family support,” it is not clear what portion of the

support was intended as spousal support and what

portion is child support. What is clear from the

Agreement is that if the Wife remarries or cohabitates

for longer than one month with someone of the opposite

sex, half of the “family support” payment is to be

deposited into a separate bank account in trust for the

children’s college education. This seems to indicate
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that half of the family support is actually spousal

support. 

* * * * * * * 

We find that in view of the surrounding

circumstances and purpose of the contract, the

allocation of the amount of $1,000.00 as spousal

support is warranted. This Court has not changed,

altered or modified the terms of the Agreement as

Husband will continue to pay support in the amount of

$2,000.00 per month as family support. However, the

Court will designate or apportion the amount to

designate $1,000.00 per month as spousal support until

such time as Wife remarries or cohabitates with a

member of the opposite sex for longer than one month. 

* * * 

S.K. graduated from high school in 2006 and was enrolled at

a college in 2007. J.K. was not enrolled at a college in 2007. 

In 2007, petitioner paid $12,000 to Ms. Vogt-Knoedler and

deducted that amount as “alimony paid” on his 2007 Federal income

tax return. Ms. Vogt-Knoedler did not report that amount as

gross income in 2007. On August 10, 2009, respondent issued to

petitioner a notice of deficiency which disallowed the claimed

alimony deduction in full, and petitioner petitioned the Court to

redetermine respondent’s determination. 

Discussion

We must determine whether petitioner may deduct as alimony

any of the $12,000 which he paid to Ms. Vogt-Knoedler in 2007.2

2Petitioner conceded in a posttrial memorandum which the

Court allowed petitioner to file in lieu of a legal brief that he

may not deduct as alimony $6,000 of the $12,000 paid to his

former wife in 2007. See Rule 151(a). 
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Respondent argues that those payments are nondeductible child

support. Petitioner argues that half of those payments are

deductible as alimony. We agree with respondent.3 

A taxpayer may generally deduct payments to a former spouse

where those payments are alimony includable in the gross income

of the former spouse. Sec. 215(a) and (b). For Federal income

tax purposes, however, alimony does not include payments fixed by

a divorce instrument that are payable for the support of the

children of the payor spouse. Sec. 71(c)(1). A payment is

treated as payable for the support of the children of the payor

spouse if the amount of the payment will be reduced on the

happening of a contingency specified in the divorce instrument

relating to a child, such as attaining a specified age, marrying,

dying, leaving school, or other similar contingencies. Sec.

71(c)(2)(A); see also sec. 1.71-1T(c), Q&A-17, Temporary Income

Tax Regs., 49 Fed. Reg. 34456 (Aug. 31, 1984). 

Petitioner argues that the State court’s decision to

allocate the family support payment equally as child support and

spousal support is binding for Federal income tax purposes. We

disagree. It is well settled that the labels assigned to

payments by the parties or a divorce court are not determinative

for Federal income tax purposes. Beard v. Commissioner, 77 T.C.

3Where, as here, the facts are not in dispute, we decide the

case without regard to the burden of proof or sec. 7491(a). 
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1275, 1283-1284 (1981). Moreover, State court adjudications

retroactively redesignating payments as alimony and not child

support (or vice versa) are generally disregarded for Federal

income tax purposes. See Gordon v. Commissioner, 70 T.C. 525,

530 (1978). Thus, it is the express terms of the agreement which

dictate the Federal income tax consequences of the payments which

Mr. Knoedler made to his former spouse and not the subsequent

State court allocation. 

The agreement contains an explicit contingency related to a

child; i.e., S.K.’s graduation from high school reduces

petitioner’s payment obligation from $2,000 per month to $1,000

per month per child in college. See sec. 1.71-1T(c), Q&A-16,

Temporary Income Tax Regs., supra. The existence of the

contingency triggers application of section 71(c)(1) and makes

petitioner’s 2007 payments to his former spouse child support not

deductible under section 215. See, e.g., Hammond v.

Commissioner, T.C. Memo. 1998-53; Fosberg v. Commissioner, T.C.

Memo. 1992-713. We conclude that petitioner may not deduct as

alimony any portion of the $12,000 that he paid to Ms. VogtKnoedler in 2007. 
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We have considered all arguments made in reaching our

decision, and to the extent not discussed, we conclude those

arguments to be moot, irrelevant, or without merit. 

To reflect the foregoing, 

Decision will be entered

for respondent.