TAX COURT OPINION

Case: Otis Henry Woodard, Jr.
Docket Number: 5304-08S
Judge: Colvin
Opinion Type: bench
Filed: 12/01/2008
Pages: 11

UNITED STATES TAX COURT WASHINGTON , D .C . 2021 7 OTIS HENRY WOODARD, JR . , Petitioner , V . COMMISSIONER OF INTERNAL REVENUE, ) Respondent . Docket No . 5304-08S --L- CAL . STAT . S .T . JUDGE FZ~~~I O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial of the above case before Special Trial Judge Lewis R . Carluzzo at Syracuse, New York, on October 15, 2008, containing his oral findings of fact and opinion rendered at the conclusion of trial . In accordance with the oral findings of fact and opinion, decision will be entered for respondent . (Signed ) Lewis R. Carluzzo Special Trial Judg e Dated : Washington, D .C . December 1, 2008 SERVED Dec 02 2008 2 1 Bench Opinion by Judge L .R . Carluzzo October 15, 2008 2 Woodard v . Commissioner 5304-08S 3 The Court has decided to render ora l 4 findings of fact and opinion in this case and th e 5 following represents the Court's oral findings of fact 6 and opinion . The oral findings of fact and opinio n 7 shall not be relied upon as precedent in any other 8 case . 9 This proceeding for the redetermination of 10 deficiency is a Small Tax case conducted pursuant to 11 the provisions of Section 7463 of the Internal Revenue 12 Code of 1986, as amended, and Rules 170 through 175 of 13 the Tax Court Rules of Practice and Procedure . 14 This bench opinion is made pursuant to the 15 authority granted by Section 7459(b) of the Internal 16 Revenue Code of 1986, as amended, and Rule 152 of the 17 Tax Court Rules of Practice and Procedure . 18 Hereinafter in this bench opinion, unless 19 otherwise indicated, section references are to the 20 Internal Revenue Code of 1986, as amended, in effect 21 for 2006 . 22 Otis Henry Woodard, Jr . appeared pro se . 23 Brian Derdowski appeared on behalf of Respondent . 24 In a notice of deficiency dated December 17, 25 2007, Respondent determined a $3,225 deficiency in Heritage Reporting Corporatio n (202) 628-4888 3 1 Petitioner' s 2006 federal income tax . The issue for 2 decision is whether amounts paid to Petitioner' s 3 former spouse pursuant to regulations promulgated 4 under authority of the Uniform Code of Militar y 5 Justice (UCMJ) are deductible as alimony . 6 Some of the facts have been stipulated and 7 are so found . Petitioner resided in New York at the 8 time the petition was filed . 9 Petitioner and his former spouse wer e 10 married to and divorced from each other in 1977 and 11 2007, respectively . Consistent with the long period 12 of separation that preceded their divorce, they did 13 not reside together at any time during 2006 . 14 Petitioner resided in Colorado while his former spouse 15 lived in New York . 16 In one capacity or another, as of the date 17 of the trial in this case, Petitioner's career in the 18 United States military spanned over 24 years . During 19 2006, Petitioner was on active duty with the U .S . Army 20 Reserves . Consequently, during that year he wa s 21 subject to the UCMJ . See 10 U .S .C . Subtitle A, Part 22 II, Chapter 47 (2001) . 23 As relevant here, Army Regulation 608-99, 24 Personal Affairs, Family Support, Child Custody and 25 Paternity, provides that "soldiers will not violate" Heritage Reporting Corporation (202) 628-4888 4 1 applicable family (in this case spousal) "financial 2 support requirements" set forth in that regulation . 3 In this case, during 2006 those financial 4 support requirements obligated Petitioner to mak e 5 certain payments to his former spouse for her support, 6 which he did, in amounts totalling at least $12,70 0 7 (the financial support payments) . AS a member of the 8 Army Reserves, Petitioner was subject to punitiv e 9 measures under the UCMJ if he failed to make the 10 financial support payments . 11 As relevant here, on his timely filed 2006 12 federal income tax return, Petitioner claimed a 13 $12,900 alimony deduction . The deduction consist s 14 entirely of the financial support payments Petitioner 15 made to his former spouse during 2006 . Taking th e 16 parties' lead, we ignore the $200 difference between 17 the amount of the financial support payments made and 18 the amount of the alimony deduction claimed . 19 In the above-referenced notice of 20 deficiency, Respondent disallowed the alimon y 21 deduction upon the ground that the financial support 22 payments do not fit within the definition of alimony . 23 In general, an individual is allowed t o 24 deduct amounts paid as alimony during the taxable year 25 to the individual's spouse or former spouse . Section Heritage Reporting Corporatio n (202) 628-4888 5 1 215 . 2 A payment constitutes alimony within the 3 meaning of Section 215 if the payment is made in cash 4 (including checks and money orders payable on demand, 5 Section 1 .71-1T(a), Income Tax Regs ., 49 Fed . Reg . 6 34455 (Aug . 9, 1989)), and (1) such payment i s 7 received by (or on behalf of) a spouse under a divorce 8 or separation instrument ; (2) the divorce o r 9 separation instrument does not designate such payment 10 as a payment that is not includable in the payee' s 11 gross income under Section 71 and is not allowable as 12 a deduction to the payor under Section 215 ; (3) if the 13 individual and the spouse are legally separated, they 14 are not members of the same household ; and (4) th e 15 payor has no liability to make any such payment for 16 any period after the death of the payee . Sections 17 71 (b) , 215(b) . 18 Respondent agrees that the financial support 19 payments satisfy all but the first requirement, that 20 is, whether those payments were made and "received by 21 (or on behalf of) [Petitioner' s former] spouse under a 22 divorce or separation instrument" . According t o 23 Respondent, the financial support payments were not 24 made pursuant to a divorce or separation instrument . 25 Petitioner disagrees . Heritage Reporting Corporation (202) 628-4888 6 1 As relevant here, the term "divorce o r 2 separation instrument" means (1) a decree of divorce 3 or separate maintenance or a written instrumen t 4 incident to such a decree ; (2) a written separation 5 agreement ; or (3) a decree other than a decree o f 6 divorce or separate maintenance requiring a spouse to 7 make payments for the support or maintenance of the 8 other spouse . Section 71(b)(2) . 9 Petitioner acknowledges that during 200 6 10 there was no decree of divorce or separat e 11 maintenance . He also acknowledges that there was no 12 separation agreement in effect between himself and his 13 former spouse as of the close of 2006 . 14 According to Petitioner, however, th e 15 obligation to support his former spouse imposed upon 16 him pursuant to the UCMJ is tantamount to a "decree" 17 as that term is used in Section 71(b)(2)(C), an d 18 therefore, the financial support payments fit within 19 the definition of alimony and are deductible as such . 20 Respondent disagrees, and for the following reasons, 21 so do we, even if equity and common sense mak e 22 Petitioner's position somewhat attractive . 23 The dispute between the parties is, i n 24 effect, reduced to their differing construction of the 25 word "decree" as that word is used in Section Heritage Reporting Corporatio n (202) 628-4888 7 1 71(b)(2)(C), and so we turn our attention to the 2 definition of that word . Unless otherwis e 3 specifically defined, the words of a statute are given 4 their ordinary meaning . Old Colony Railroad Company 5 v . Commissioner , 284 U .S . 552 (1932) . 6 The word "decree" is not specifically 7 defined in the relevant statutory scheme . It i s 8 defined by Black's Law Dictionary (6th edition 1990) 9 410-411, as follows : "The judgment of a Court o f 10 equity or chancery, answering for most purposes to the 11 judgment of a Court of Law . A decree in equity is a 12 sentence or order of the Court, pronounced on hearing 13 and understanding all the points in issue, an d 14 determining the rights of all the parties to the suit, 15 according to equity and good conscience . " 16 "It is a declaration of the Court announcing 17 the legal consequences of the facts found . With the 18 procedural merger of law and equity in the Federal and 19 most State Courts under the Rules of Civil Procedure, 20 the term "judgment" has generally replaced "decree" . 21 Webster's Dictionary defines the word to me 22 (1) an order usually having the force of law ; (2) a 23 religious ordinance enacted by council ; (3) a judicial 24 decision of the Roman emperor ; and (4) a judicial 25 decision, especially in an Equity or Probate Court . Heritage Reporting Corporatio n (202) 628-4888 8 1 Similarly, and applying more moder n 2 technology, dictionary .com, unabridged (vl .l) Random 3 House, Inc ., defines the word "decree" in relevan t 4 part as follows : (1) a formal and authoritativ e 5 order, especially one having the force of law : e .g . a 6 presidential decree ; (2) Law . A Judicial decision or 7 order . 8 Each of the above definitions includes a 9 reference to a court order, but it is clear that in 10 this case there was no court order of any kind i n 11 effect during 2006 . In numerous other cases we have 12 broadly construed the word to contemplate any court 13 order noting that the form of the order is no t 14 determinative . See, e .g . Peterson v . Commissioner , 15 T .C . Memo 1998-217 ; Landreth v . Commissioner , T .C . 16 Memo 1997-169 . 17 Further, it is clear that the obligation 18 arising under the UCMJ is not tantamount to a n 19 obligation arising pursuant to a court order and 20 Petitioner does not strenuously argue that it does . 21 Two of the above dictionary definitions suggest that 22 the word "decree" includes an authoritative order that 23 has the force of law . 24 If the above-cited Army regulation has the 25 force of law, then it might be a "decree" within the Heritage Reporting Corporatio n (202) 628-4888 9 1 meaning of Section 71(b)(2)(C), even though not a 2 "decree of divorce or separate maintenance" within the 3 meaning of Section 71(b)(2(A) . 4 This is the main thrust of Petitioner' s 5 position, and we focus our attention on this aspect of 6 the definition . In so doing, we begin by noting that 7 Petitioner's obligation to make spousal suppor t 8 payments in 2006 arose from his employment with the 9 military . 10 As such , we find nothing that suggests that 11 the spousal support obligation imposed upon Petitioner 12 pursuant to the UCMJ, although from an authoritative 13 source that compels compliance, has any more force of 14 law than any employment obligation imposed on an y 15 employee by any employer . 16 As we view the matter, employment-base d 17 obligations do not have the force of law necessary to 18 treat the source of the obligation as a "decree " 19 within the meaning of Section 71(b)(2)(C), even if the 20 employment - based obligation arises under a U .S . Army 21 regulation . 22 Given Petitioner's long career with the 23 military, we expect and appreciate his disagreement 24 with our finding on the point . Nevertheless , 25 consistent with our finding, our research discloses no Heritage Reporting Corporation (202) 628-4888 1 0 1 authority that allows for an alimony deduction where 2 the obligation of spousal support arises from an 3 employment relationship . 4 Petitioner's position that the financial 5 support payments were made pursuant to a decree within 6 the meaning of Section 71(b)(2)(C) is rejected . Those 7 payments therefore were not made pursuant to a divorce 8 or separation instrument and do not fit within th e 9 definition of alimony . 10 Petitioner is not entitled to an alimony 11 deduction for the financial support payments made to 12 his former spouse in 2006 . He does not suggest that 13 the payments are otherwise deductible, and we ar e 14 aware of no other provisions of the Internal Revenue 15 Code that would allow a deduction for those payments . 16 It follows that Respondent's disallowance of 17 the alimony deduction claimed on Petitioner's 200 6 18 federal income tax return is sustained . 19 In closing, we think it appropriate to 20 comment on a point raised at trial, that is, th e 21 manner in which Petitioner's former spouse treated the 22 financial support payments for purposes of her 200 6 23 federal income tax liability . 24 We begin by noting that we agree wit h 25 Petitioner's observation that the manner in which she Heritage Reporting Corporatio n (202) 628-4888 1 1 1 treated those payments (which is not known) is no t 2 relevant here, and we certainly have no jurisdiction 3 in this proceeding with respect to her income tax 4 liability for 2006 or any other year for that matter . 5 Nevertheless , and for what it is worth, the 6 amount of time the parties spent on the point during 7 trial compels the following brief observation . Our 8 finding that the financial support payments do not fit 9 within the definition of alimony does not necessarily 10 lead to the conclusion that the payments are 11 excludable from the income of Petitioner ' s forme r 12 spouse . See Commissioner v . Glenshaw Glass , 348 U .S . 13 426 ( 1955) . 14 To reflect the foregoing, decision will be 15 entered for Respondent . 16 This concludes the Court ' s oral findings of 17 fact and opinion in this case . 18 (Whereupon , at 2 :00 p .m ., the bench opinion 19 in the above entitled matter was concluded . ) 20 21 22 23 2 4 25 Heritage Reporting Corporation (202) 628-4888