T.C. Memo. 2011-266

UNITED STATES TAX COURT

ANDREW DEAN SHELTON, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 14981-09. Filed November 10, 2011.

Andrew Dean Shelton, pro se.

James A. Kutten, for respondent.

MEMORANDUM OPINION

FOLEY, Judge: The issues for decision, relating to

petitioner’s 2007 Federal income tax return, are whether

petitioner is entitled to an alimony deduction and whether
- 2 -

petitioner is liable for a section 6662(a)1 accuracy-related

penalty. The parties submitted this case fully stipulated

pursuant to Rule 122. 

Background

Petitioner married Valerie R. Shelton in 2003. On November

23, 2007, petitioner and Ms. Shelton entered into a marital

settlement agreement (settlement agreement), which provided

mutually agreed-upon terms for their divorce. The settlement

agreement required petitioner to pay Ms. Shelton $25,000

“representing her share of his separation pay from the military,

in addition to any interest she claims in the real estate and

furniture still in the marital home.” The settlement agreement

further stated that the payment “constitutes full and final

settlement of any additional claims to a share of assets” and

that each party waived any claim for maintenance from the other

party.

On November 29, 2007, the Circuit Court for the Twentieth

Judicial Circuit in St. Clair County, Illinois, entered a

judgment of dissolution of marriage (divorce decree) terminating

petitioner’s and Ms. Shelton’s marriage. The divorce decree

1Unless otherwise indicated, all section references are to

the Internal Revenue Code in effect for the year in issue, and

all Rule references are to the Tax Court Rules of Practice and

Procedure.
- 3 -

stated that each party was barred from asserting any claim “for

maintenance, formerly known as alimony,” and it incorporated by

reference the terms of the settlement agreement.

In December 2007, petitioner paid Ms. Shelton $25,000 (the

payment).2 In April 2008, petitioner filed a Federal income tax

return relating to 2007 and deducted, as alimony, $25,000. In a

statutory notice of deficiency dated March 20, 2009, and relating

to 2007, respondent determined petitioner was not entitled to the

alimony deduction and was liable for a section 6662(a) accuracyrelated penalty. On June 19, 2009, petitioner, while residing in

Illinois, filed his petition with the Court.

Discussion

Petitioner contends that the payment is alimony and is,

therefore, deductible. Respondent contends that none of the

payment is deductible because it does not qualify as alimony and

is instead a division of marital property. 

An individual may generally deduct payments made during the

taxable year to the extent that those payments are alimony or

separate maintenance includable in the recipient’s gross income. 

See sec. 215(a) and (b). Section 71(a) requires amounts received

as alimony to be included in gross income. 

2Petitioner paid Ms. Shelton $24,000 by wire transfer on

Dec. 5, 2007, and $1,000 by check dated Dec. 6, 2007. 
- 4 -

In order to qualify as alimony, the payment must meet the

requirements of section 71(b)(1)(A) through (D). Because the

payment does not meet the requirements of section 71(b)(1)(B), we

need not address whether it meets the other requirements. 

Section 71(b)(1)(B) requires that the divorce instrument “not

designate such payment as a payment which is not includible in

gross income under this section and not allowable as a deduction

under section 215”. The divorce decree provides clear, explicit,

and express direction that neither party shall receive alimony or

a separate maintenance payment. See Estate of Goldman v.

Commissioner, 112 T.C. 317, 323 (1999), affd. without published

opinion sub nom. Schutter v. Commissioner, 242 F.3d 390 (10th

Cir. 2000). Accordingly, the payment does not meet the

requirements of section 71(b)(1)(B), and thus petitioner is not

entitled to a deduction pursuant to section 215.3

Respondent further determined that petitioner is liable for

a section 6662(a) accuracy-related penalty relating to 2007. 

Section 6662(a) and (b)(1) imposes a 20-percent penalty on the

amount of any underpayment of tax attributable to negligence or

3Pursuant to sec. 7491(a), petitioner has the burden of

proof unless he introduces credible evidence relating to the

issue that would shift the burden to respondent. See Rule

142(a). Our conclusions, however, are based on a preponderance

of the evidence, and thus the allocation of the burden of proof

is immaterial. See Martin Ice Cream Co. v. Commissioner, 110

T.C. 189, 210 n.16 (1998).
- 5 -

disregard of rules or regulations. Respondent bears, and has

met, the burden of production relating to this penalty. See sec.

7491(c); Higbee v. Commissioner, 116 T.C. 438, 446 (2001). 

Moreover, petitioner did not act with reasonable cause and in

good faith. The divorce decree explicitly stated that neither

party was entitled to alimony, yet petitioner proceeded to claim

an alimony deduction. Accordingly, we sustain respondent’s

determination.

Contentions we have not addressed are irrelevant, moot, or

meritless.

To reflect the foregoing, 

Decision will be entered

for respondent.