Court Opinion

ID: 9930793
Source: CourtListenerOpinion
Date Created: 2024-02-07 18:01:27.761408+00
Date Added: 2024-06-11T11:40:10.685430
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        FEB 7 2024
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

ALEJANDRO J. ROJAS; ELENA G.                    No.    22-70232
ROJAS,
                                                Tax Ct. No. 7453-19
                Petitioners-Appellants,

 v.                                             MEMORANDUM*

COMMISSIONER OF INTERNAL
REVENUE,

                Respondent-Appellee.

                           Appeal from a Decision of the
                             United States Tax Court

                           Submitted February 5, 2024**
                              Pasadena, California

Before: WARDLAW, FRIEDLAND, and SUNG, Circuit Judges.

      Petitioners Alejandro J. and Elena Rojas appeal from the Tax Court’s

decision affirming the Commissioner of Internal Revenue’s denial of an alimony

deduction under 26 U.S.C. § 215(a) and the Commissioner’s related conclusion

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
that Petitioners owe a federal income tax deficiency for the 2016 tax year. We

review the Tax Court’s decision “on the same basis as decisions in civil bench

trials in district court, and accordingly, we review conclusions of law de novo and

questions of fact for clear error.” Gardner v. Comm’r of Internal Revenue, 845

F.3d 971, 975 (9th Cir. 2017). We have jurisdiction under 26 U.S.C. § 7482, and

we affirm.

      Pursuant to 26 U.S.C. § 71(c), the Commissioner denied the § 215(a)

deduction because the Commissioner found that, under the language of Mr. Rojas’s

divorce judgment, Mr. Rojas’s payments to his former wife would terminate upon

the emancipation of their children. Applying § 71(c), the Commissioner concluded

that the full termination of the payments constituted a reduction dependent “on the

happening of a contingency specified in the instrument relating to a child (such as

attaining a specified age, marrying, dying, leaving school, or a similar

contingency),” so the payment could not be claimed as an alimony deduction from

Mr. Rojas’s taxes. See 26 U.S.C. § 71(c)(2)(A).1 Petitioners argue solely that the

§ 71(c) exception to the § 215(a) deduction cannot apply because a California

Superior Court already determined in 2014 that there was “no current child support

1
 26 U.S.C. §§ 71 and 215 were both repealed on December 22, 2017, for divorce
and separation agreements executed or modified after December 31, 2018. Budget
Fiscal Year, 2018, Pub. L. No. 115-97, § 11051, 131 Stat. 2054, 2089–90. Because
Petitioners claim a deduction under § 215 for the 2016 tax year based on a 2012
divorce judgment, we reference the versions of the statute in effect in 2016.

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order” in the 2012 divorce judgment between Mr. Rojas and his former wife.

Petitioners argue that the Full Faith and Credit Act, 28 U.S.C. § 1738, precludes

the Commissioner from relitigating whether the “family support” provision in the

divorce judgment is “child support” within the § 71(c) exception. It does not, for at

least two reasons.

      First, the Tax Court did not err in finding that Petitioners misinterpreted the

California Superior Court’s 2014 order. The Tax Court concluded that the Superior

Court’s order “merely reflects that under the express terms of the divorce

instrument the payments in question were labeled neither as ‘child support’ nor as

‘spousal support’ but rather as ‘family support,’ which under California law

represents combined, but unallocated, child support and spousal support.” Rojas v.

Comm’r of Internal Revenue, 124 T.C.M. (CCH) 40, 2022 WL 2800493, at *5

(T.C. 2022) (citing Cal. Fam. Code § 92 (West 2022)). Upon review of the

California Superior Court’s order and the text of the divorce judgment, we agree.

The Superior Court’s order simply clarifies the category of support as labeled in

the divorce judgment, without commenting on the nature of the “family support”

for tax purposes or determining whether such support constitutes a child-related

contingency. Accordingly, the Full Faith and Credit Act did not bar the

Commissioner from litigating those unresolved questions before the Tax Court.

      Second, the plain text of § 71(c) does not condition the availability of the

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§ 215(a) deduction on the label given to maintenance support by the parties or a

family court. Rather, the language of the statute emphasizes the functional inquiry

of whether a child-related contingency triggers any reduction in the maintenance

support. See 26 U.S.C. § 71(c)(2). Although we are not bound by the Tax Court’s

rulings, we note that the Tax Court has consistently interpreted maintenance

support subject to reduction due to a child-related contingency as triggering

§ 71(c)—regardless of the label that divorcing spouses have given to the

maintenance support. See, e.g., Biddle v. Comm’r of Internal Revenue, 119 T.C.M.

(CCH) 1249 (T.C. 2020); Hammond v. Comm’r of Internal Revenue, 75 T.C.M.

(CCH) 1745 (T.C. 1998). Here, because the 2012 divorce judgment conditions the

termination of the family support payment on the emancipation of both minor

children, the Commissioner correctly determined that § 71(c) bars a deduction for

those amounts paid by Mr. Rojas to his former wife.2

      AFFIRMED.

2
  Even assuming Petitioners adequately preserved their argument that they should
receive an equitable exception from the application of § 71(c), it is settled law that
“[t]he Tax Court is a court of limited jurisdiction and lacks general equitable
powers.” Comm’r of Internal Revenue v. McCoy, 484 U.S. 3, 7 (1987) (per
curiam).

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