T.C. Memo. 1996-258

UNITED STATES TAX COURT

 RONALD J. MURPHY, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

DIANE D. MURPHY, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket Nos. 3201-94, 8531-94. Filed June 5, 1996.

Petitioner husband (H) and petitioner wife (W)

were divorced. Subsequently, H was directed by a

California court to pay monthly "family support"

payments (the marital payments) to W. H deducted the

marital payments as alimony pursuant to sec. 215,

I.R.C. W did not report the marital payments as gross

income pursuant to sec. 71, I.R.C. R disallowed H's

deduction and included the marital payments in W's

income.

1. Held: The marital payments are not alimony;

therefore H may not deduct such payments, and W need

not include them in gross income.

2. Held, further, R's determination of penalties

under sec. 6662, I.R.C., against H is sustained.
- 2 -

Ronald J. Murphy, pro se.

Elainie Honjas, for petitioner in docket No. 8531-94.

Matthew R. Kretzer and Barbara Leonard, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

HALPERN, Judge: These cases have been consolidated for

trial, briefing, and opinion because they involve a common

question of fact and law: viz, whether payments made by

petitioner Ronald J. Murphy (Ronald Murphy) to petitioner

Diane D. Murphy (Diane Murphy), his ex-wife, constitute alimony

for purposes of the Federal income tax. In the notices of

deficiencies and in her pleadings, respondent has taken

inconsistent positions, disallowing alimony deductions to Ronald

Murphy but requiring Diane Murphy to report alimony income.

Respondent, however, does not ask us to sustain her inconsistent

positions. Respondent is content that we determine the tax

consequences of the subject payments (the marital payments)

consistently between petitioners.

Respondent has determined both deficiencies in income tax

and accuracy related penalties against Ronald Murphy. Those

amounts are as follows:

Penalty under

Year Deficiency Sec. 6662

1990 $15,180 $3,036

1991 16,509 3,302
- 3 -

Respondent has determined only deficiencies in income tax

against Diane Murphy. Those amounts are as follows:

Year Deficiency

1990 $9,508

1991 11,006

The sole issue for consideration in Diane Murphy’s case is

the tax treatment of the marital payments. In Ronald Murphy’s

case, however, we must also consider the accuracy related

penalties. Moreover, for 1991, respondent’s determination of a

deficiency in tax is based not only on the tax treatment of the

marital payments but also on two additional adjustments to

income, one in the amount of $4,863, described as “Itemized

Deductions”, and the other in the amount of $1,118, described as

“Deduction for Exemptions”. Although no further explanation of

the two additional adjustments accompanies respondent’s

determination of a deficiency in tax, we suspect that those

adjustments are consequential adjustments following from

respondent’s adjustment with respect to the marital payments. 

Ronald Murphy assigned no error with respect to those

adjustments. Under our Rules, he is thus deemed to have conceded

any issue with respect to those adjustments. See Rule 34(b)(4). 

Even if those two adjustments are merely consequential, however,

and had error been assigned in the petition on that basis, we
- 4 -

would reach no different result because we uphold respondent’s

adjustments with respect to the marital payments.

Unless otherwise noted, all section references are to the

Internal Revenue Code in effect for the years at issue, and all

Rule references are to the Tax Court Rules of Practice and

Procedure.

FINDINGS OF FACT

Some of the facts have been stipulated and are so found. 

The stipulation of facts filed by the parties and accompanying

exhibits are incorporated herein by this reference.

When the petitions in these cases were filed, Ronald Murphy

and Diane Murphy resided in Mountain View, California, and Los

Altos, California, respectively. 

Petitioners were married in 1963. On February 1, 1988, the

Superior Court of California, County of Santa Clara (the Superior

Court), entered a judgment of dissolution of petitioners’

marriage. 

On January 5, 1990, petitioners stipulated, and on

January 12, 1990, the Superior Court ordered, that Ronald Murphy:

“shall pay to * * * [Diane Murphy] for Family Support the sum of

$4,000.00 for the month of January, 1990 and $4,000 on account of

Family Support for the month of February, 1990”. 

At a settlement conference held on March 28, 1990, the

Superior Court orally ordered that, commencing March 1, 1990,
- 5 -

Ronald Murphy would pay $4,000 a month to Diane Murphy as family

support. 

With respect to Diane Murphy’s case only, Ronald Murphy paid

no more than $29,800 and $28,800 to Diane Murphy in 1990 and

1991, respectively. 

Ronald Murphy made Federal income tax returns for 1990 and

1991 on the basis of a calendar year. He made those returns on

Forms 1040, U.S. Individual Income Tax Return, and, for each

year, he claimed deductions for alimony paid to Diane Murphy. 

For 1990, he claimed an alimony deduction of $46,000; for 1991,

he claimed an alimony deduction of $48,500.

Diane Murphy also made Federal income tax returns for 1990

and 1991 on Forms 1040, on the basis of a calendar year. Diane

Murphy reported no income related to alimony for either year.

Petitioners have four children, three of whom lived with

Diane Murphy during 1990 and 1991. 

OPINION

I. Introduction

We must determine whether certain payments made on account

of the dissolution of the marriage of petitioners (Ronald Murphy

and Diane Murphy) are alimony for Federal income tax purposes. 

If such payments (the marital payments) are alimony, then they

are deductible by Ronald Murphy and includable in gross income by

Diane Murphy. If the marital payments are not alimony, then they

are not deductible by Ronald Murphy and are not includable in
- 6 -

gross income by Diane Murphy. The relevant rules are found in

sections 71 and 215.

II. Diane Murphy

As stated, in the notices of deficiency and in her

pleadings, respondent has taken inconsistent positions with

respect to petitioners: Respondent has required Diane Murphy to

include the marital payments in gross income but has denied

Ronald Murphy any deductions. On brief, however, respondent

clearly favors Diane Murphy. Respondent does not make

alternative proposed findings of fact, but makes only proposed

findings of fact that, in sum, are inconsistent with a finding

that Diane Murphy received any alimony from Ronald Murphy. 

Respondent’s arguments are consistent with her proposed findings

of fact. Accordingly, we consider respondent as having conceded

that none of the marital payments received by Diane are alimony. 

For purposes of Diane Murphy’s case, we find that none of the

payments made by Ronald Murphy to Diane Murphy are alimony. We

hold that no amount must be included in Diane Murphy’s income

pursuant to section 71, and we determine that there are no

deficiencies in Diane Murphy’s income tax for either 1990 or

1991.

III. Ronald Murphy

A trial in this case was held on June 15, 1995. Ronald

Murphy was present at the trial. At the conclusion of the trial,
- 7 -

the Court directed the parties to file briefs. Ronald Murphy has

filed no brief.

The requirement to file briefs is found in Rule 151, the 

provisions of which are not permissive but mandatory. On

occasion, when a party has failed to file a brief, we have

dismissed the case with respect to those issues for which the

party bore the burden of proof, Stringer v. Commissioner, 84 T.C.

693, 704 (1985) (“tactics employed by petitioners and their

counsel were carefully calculated to prevent any meaningful

resolution of their case.”), affd. without published opinion 789

F.2d 917 (4th Cir. 1986), or we have deemed the party to have

conceded all such issues, Mock v. Commissioner, T.C. Memo. 1987-

382 (petitioner “clearly aware” of his obligations to organize

the extensive material presented at trial and to give the Court

his views of the controlling legal authorities). More commonly,

however, we have taken note of a party’s failure to file a brief

and have gone on to decide the issues on which the party bore the

burden of proof on the basis of the stipulation of facts and its

attached exhibits, the record made at trial, and respondent’s

brief. E.g., Calcutt v. Commissioner, 84 T.C. 716 (1985);

Giouzelis v. Commissioner, T.C. Memo. 1991-595. We shall follow

that last course here.

Ronald Murphy has failed to carry his burden of proving that

the marital payments are alimony within the meaning of section
- 8 -

1 Sec. 71(b)(1) provides:

(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 under this section

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.

2 The California Family Code, enacted in 1992 and operative

from Jan. 1, 1994, was derived from the family law provisions of

the California Civil Code, Code of Civil Procedure, Evidence

Code, and Probate Code. Prior to the enactment of Cal. Fam. Code

secs. 92 and 4066, "family support" was made available under Cal.

Civ. Code secs. 4811(d) and 4721(p)(West 1983). See In re

Marriage of Leathers, 221 Cal. Rptr. 78, 81 (Ct. App. 1985);

People v. Dilday, 25 Cal. Rptr. 2d 386, 387 (App. Dept. Super.

(continued...)

71(b).1 The stipulated facts establish that Ronald Murphy was

ordered to pay “family support”. Under California law, an order

of “family support” is an order that combines child and spousal

support. See Cal. Fam. Code secs. 92, 4066 (West 1994).2 Once
- 9 -

2(...continued)

Ct. 1993).

ordered by a court, child support survives the death of the payee

custodial parent and continues as an obligation of the payor

noncustodial parent. In re Marriage of McCann, 32 Cal. Rptr.2d

639 (Ct. App. 1994); In re Marriage of Gregory, 281 Cal. Rptr.

188 (Ct. App. 1991). Recently, in Ambrose v. Commissioner, T.C.

Memo. 1996-128, we addressed a question concerning California

family support. In that case, the taxpayer (the ex-wife) had

argued that a part of the family support payments received by her

was not alimony because, under California law, a noncustodial

parent’s obligation for child support is not terminated upon

death of the custodial parent (the ex-wife). The taxpayer was

relying on the fact that cessation of payments on the death of

the payee spouse is a necessary element of alimony. Sec.

71(b)(1)(D). We said that, to be successful, the ex-wife would

have to show that a portion of the family support payments

received by her would survive her death. We found against the

ex-wife based on our holding that California law does not provide

for the segregation of unallocated or undifferentiated child and

spousal support payments (i.e., family support). An examination

of the California cases we relied on, which dealt with the

remarriage, not the death, of the payee spouse, Danz v. Danz, 216

P.2d 162 (Cal. Ct. App. 1950); Hale v. Hale, 45 P.2d 246 (Cal.

Ct. App. 1935), shows that the trial courts could have continued
- 10 -

the payments in question undiminished after the remarriage of the

payee spouse. See, e.g., Danz v. Danz, supra at 165 (no abuse of

discretion in trial court’s refusal to enforce husband’s

obligation to pay combined alimony and child support beyond

remarriage of wife). We have found no contrary authority on our

own, and, as stated, we have not been favored with a brief by

Ronald Murphy. For purposes of this case, we shall assume that

the obligation to make the marital payments could have survived

the remarriage or death of Diane Murphy. Moreover, there is

insufficient evidence for us to find that the marital payments

would not have survived the death of Diane Murphy before the

majority of the children in her custody. Thus, Ronald Murphy has

failed to prove a necessary element of section 71(b)(1), viz, the

subparagraph (D) requirement of cessation on the death of the

payee spouse, and, consequently, he has failed to prove that the

marital payments are alimony within the meaning of section 71(b).

Finally, respondent has determined section 6662(a) penalties

against Ronald Murphy for both 1990 and 1991. Section 6662(a)

provides for the imposition of a penalty on any portion of an

underpayment that is attributable to, among other causes,

(1) negligence or disregard of rules or regulations, or (2) any

substantial understatement of income tax. In the petition,

Ronald Murphy assigned error to respondent’s determinations of

section 6662 penalties but did not aver any facts in support of

that assignment. We assume that Ronald Murphy relies on our
- 11 -

determining no (or reduced) deficiencies to defeat (or

ameliorate) the penalties. Since we sustain the deficiencies

determined by respondent, we find no basis for redetermining the

penalties determined by respondent.

On the premises stated, we sustain respondent’s

determinations of deficiencies and penalties with respect to

Ronald Murphy.

Decision will be entered for

respondent in docket No. 3201-94.

Decision will be entered for

petitioner in docket No. 8531-94.