TAX COURT OPINION

Case: Edwin Ritter Jonas, III
Docket Number: 6384-07
Judge: Haines
Opinion Type: memo
Filed: 03/05/2009
Pages: 5

T .C . Memo . 2009-4 9 UNITED STATES TAX COUR T EDWIN RITTER JONAS, III, Petitioner v . COMMISSIONER OF INTERNAL REVENUE, Responden t Docket No . 6384-07 . Filed March 5, 2009 . Edwin Ritter Jonas, III, pro se . Carol-Lynn E . Moran , for respondent . MEMORANDUM FINDINGS OF FACT AND OPINIO N HAINES, Judge : Respondent determined deficiencies with respect to petitioner's Federal income taxes as follows : Year Deficiency 2002 $10,193 2003 28 7 SERVED Mar 05 2009 - 2 - The issue for .decision after concessions' is whether petitioner is entitled to a $36,000 alimony deduction under section 215(a) for each of the years 2002 and .2003 (the years at issue) . 2 FINDINGS OF FAC T Some of the facts have been stipulated and are so found . The stipulation of facts and the supplemental stipulation of facts, together with attached exhibits, are incorporated herein by this reference . At the time petitioner filed his petition, he resided in Montana . Petitioner divorced his wife, Linda Jonas (Ms . Jonas), in New Jersey in 1988 . On January 12, 1996, after a series of acrimonious legal battles involving child custody and alimony issues, the Superior Court of New Jersey Chancery Divisio n (Chancery Division) imposed on a portion of his property a constructive trust for the benefit of Ms . Jonas . The Chancer y .Division instructed that the property would be used to guarantee payments of medical expenses , child support, alimony, and counsel fees to Ms . Jonas, as well as reimbursements to a child' s 'Petitioner concedes that he underreported his gross receipts by $15,049 in 2002 and $3,706 in 2003 . Respondent concedes that petitioner is entitled to a home mortgage interest expense deduction of $7,748 for 2002 . 2Unless,_otherwise indicated, all section references are to the Internal Revenue Code, as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure . Amounts are rounded to the nearest dollar . A - 3 - brokerage account and other expenses as deemed necessary . Jonas was authorized to sell trust property to ensure payment of spousal and child support . On May 19, 1999, the Chancery Division ordered petitioner to make alimony and other support payments"of $3,000 per month to Ms . Jonas . Petitioner did not make the payments, and real property held in constructive trust was sold'in order to provide Ms . Jonas with funds for arrearages, attorney's fees, alimony, and child support . These funds were exhausted by the end o f 2001 . Petitioner timely filed a Form,1040, U .S . Individual Income Tax Return, for both 2002 and 2003 . ' Petitioner claimed a $36,000 alimony deduction for each year . However, petitioner did no t make direct alimony payments to Ms .-Jonas'in'either 2002 or 2003, nor did Ms . Jonas receive payments from petitioner of any kind during those years . On February 6 ;° 2006, petitioner executed.a Form 872,- Consen t to Extend the Time to Assess Tax, for 2002 and 2003, thereby extending the period of limitations until December 31, 2007 . On February 13, 2006, respondent executed the extension . - On May 23, 2006, the Chancery Division entered an order against petitioner for $243,000 in unpaid alimony from April 1, 1999, through December 31,'2005 . The Chancery Division also entered a'"judgment'against petitioner for $695,477 and interest - 4 - of $147,205 for accruals resulting from petitioner's divorce from, Ms . Jonas . On January 4, 2007, respondent timely,mailed a .notice of deficiency to petitioner . The notice disallowed alimony deductions petitioner . claimed in both 2002 and 2003 . Petitioner filed a timely petition with this,Court, and a trial was held,,o n April 21, 2008, in Philadelphia, Pennsylvania . OPINION F f Section 215(a) provides .that,an individual is allowed as a deduction the amount equal to the alimony or separate maintenance payments paid during the individual's taxable year . The term "alimony or .separate maintenance payment" means any alimony-or separate maintenance payment (as defined in section 71(b)) which .is includable,in the gross income of the recipient under section 71 . Sec . 215(b)_ For,Federal income tax purposes,,payments are . alimony includable in a spouse's gross income when the-following requirements are met : (1) The payments are,made-in cash, (2) the payments are received by (or on behalf- .of) the,spouse under a divorce or separation instrument, (3) the divorce or separation instrument does not provide that .the payments are,not reportable as alimony, (4) the spouses, if legally separated under a decree of divorce or of separate maintenance, reside .in separate . households at the time the payments . are made, (5) the-spouses do not file a joint return, and (6) there .- .is-no liability to make - 5 - any such payment, or a substitute for such payment, in cash or property, after the death of the payee spouse . Sec . 71(b)(1)(A)- (D), (e) . Petitioner bears the burden of proving respondent's determinations are incorrect . See Rule 142(a) . Petitioner has failed to satisfy the requirements of section 71 . Petitioner did not make any payments to Ms . Jonas during the years at issue . Petitioner paid nothing to Ms . Jonas directly during those years, and the proceeds from the sale of property held in constructive trust were exhausted by the end of 2001 . Although the Chancery Division ordered petitioner to make payments for the years at issue that would have constituted alimony had they been made, petitioner made no payments . Therefore, we hold that petitioner is not entitled to alimony deductions for the years at issue . In reaching these holdings, the Court has considered all arguments made and, to the extent not mentioned, concludes that they are moot, irrelevant, or without merit . To reflect the foregoing, Decision will be entere d under Rule 155 .