Court Opinion

ID: 4334804
Source: CourtListenerOpinion
Date Created: 2018-11-14 01:53:26.469075+00
Date Added: 2024-06-11T13:29:34.428969
License: Public Domain

WILLIAM ROBERTSON MCSKIMMING III, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, RespondentMCSKIMMING v. COMMISSIONERNo. 17953-02SUnited States Tax CourtT.C. Summary Opinion 2004-21; 2004 Tax Ct. Summary LEXIS 24; March 5, 2004, Filed 2004 Tax Ct. Summary LEXIS 24">*24  PURSUANT TO INTERNAL REVENUE CODE SECTION 7463(b), THIS OPINION MAY NOT BE TREATED AS PRECEDENT FOR ANY OTHER CASE.  William Robertson McSkimming III, pro se.Warren P. Simonsen, for respondent.  Panuthos, Peter J.Panuthos, Peter J.PANUTHOS, Chief Special Trial Judge : This case was heard pursuant to the provisions of section 7463 of the Internal Revenue Code in effect at the time the petition was filed. The decision to be entered is not reviewable by any other court, and this opinion should not be cited as authority. Unless otherwise indicated, subsequent 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.Respondent determined a deficiency in Federal income tax of $ 6,448 for the 2000 taxable year. The issue for decision is whether unallocated support payments constitute "alimony or separate maintenance payments" that petitioner may deduct under section 215.BackgroundSome of the facts have been stipulated and are so found. The stipulated facts and the related exhibits are incorporated herein by this reference. At the time of2004 Tax Ct. Summary LEXIS 24">*25  filing the petition, petitioner resided in Edgewater, Maryland.Petitioner was previously married to Sandra L. McSkimming (Ms. McSkimming). They have three children: (1) Brian McSkimming (Brian), born October 28, 1978; (2) Daniel McSkimming (Daniel), born June 14, 1981; and (3) Megan McSkimming, born May 23, 1984.On May 27, 1993, Ms. McSkimming filed an action for divorce in the Supreme Court of the State of New York, County of Erie (New York court). Petitioner executed a stipulation on March 18, 1994, entering into a pendente lite arrangement in which he would pay Ms. McSkimming the sum of $ 400 per week "as and for unallocated family support, commencing immediately." The stipulation noted:   That in consideration for the above referenced family support,   the Plaintiff, SANDRA L. McSKIMMING, shall be responsible to pay   for mortgage payments on the marital residence, homeowner's   insurance at the marital residence, gas/oil, electric,   telephone, water/sewer, cable, food, and piano and dancing   lessons pending the trial and determination of this action. [6] A judgment of divorce was filed with the New York court on January 23, 1996. 2004 Tax Ct. Summary LEXIS 24">*26  Certain unresolved financial issues were addressed during a proceeding on June 28, 1996, before an Official Matrimonial Referee of the New York court. Ms. McSkimming and petitioner were both represented by counsel, who entered into the following oral stipulation on behalf of their clients:     [Ms. McSkimming's attorney]: With respect to maintenance,   Mr. McSkimming agrees to pay to Mrs. McSkimming the sum of   fifteen thousand dollars per year for five years, and then an   additional ten thousand dollars a year for the next three years   for a total of eight years. It's been agreed that if Mrs.   McSkimming either remarries or co-habits with someone who is not   a relative, which she is doing now, she will still be entitled   to one-half of the balance of the maintenance due at the time of   her remarriage.           *   *   *   *   *   *   *     [Ms. McSkimming's attorney]: With respect to the issue of   -- the maintenance shall be paid on a weekly basis. With respect   to the issue of child support --     [Petitioner's attorney]: Excuse2004 Tax Ct. Summary LEXIS 24">*27  me. Mr. McSkimming will   continue to pay the four hundred dollars per week unallocated   maintenance and support until Mr. Cinelli completes his report   and we have a subsequent order with regard to maintenance and   child support.     [Ms. McSkimming's attorney]: Yeah. With respect to the   child support, right now there is not an agreement as to the --   either applicability or non-applicability of the Child Support   Standards Act as there are some issues, as [petitioner's   attorney] eluded [sic] to, to be investigated by Mr. Cinelli.   Therefore, that prior order shall continue, and upon Mr.   Cinelli's report back to the Court, we will then hopefully come   to an agreement on the amount of child support to be paid, or,   if not, we will, of course, set it down for further proceedings   to make that ultimate determination. But we are not making that   determination today.           *   *   *   *   *   *   *     THE REFEREE: * * * It would seem to me that once that   visitation schedule has been set, it is simply2004 Tax Ct. Summary LEXIS 24">*28  a matter of   calculation between yourselves and your attorneys as to how to   then prorate the amount of support that's going to be paid and   how to break out of the present unallocated support, the figure   of support and maintenance. Therefore, you shouldn't have to   appear in front of the Court so long as there is cooperation   with Mr. Cinelli with regard to setting forth some reasonable   visitation. * * * [8] There was no further proceeding to fix a specific amount as to child support.Ms. McSkimming had remarried by 2000.1 Petitioner nevertheless paid Ms. McSkimming $ 400 per week during 2000, for a total sum of $ 20,800.22004 Tax Ct. Summary LEXIS 24">*29  During the year in issue, petitioner and Ms. McSkimming had joint custody of their three children. Ms. McSkimming had physical custody, while petitioner had the right to reasonable and liberal visitation.Petitioner filed a timely Form 1040, U.S. Individual Income Tax Return, for the 2000 taxable year. Petitioner claimed a dependency exemption deduction for Daniel and a deduction for alimony paid in the amount of $ 20,800.Respondent determined that petitioner was not entitled to a deduction for alimony paid for the 2000 taxable year.Discussion 3Payments to support children generally are not deductible. Sec. 71(c). However, alimony or separate maintenance payments generally are deductible by the payor spouse. Sec. 215. Alimony or separate maintenance payments are defined by section 71(b), which provides2004 Tax Ct. Summary LEXIS 24">*30  in part:     SEC. 71(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       2004 Tax Ct. Summary LEXIS 24">*31  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. [14] We look to the terms of the applicable instrument, or to State law, if the instrument is silent on the matter. See Kean v. Commissioner, T.C. Memo. 2003-163. Under New York law, child support is "a sum to be paid pursuant to court order or decree by either or both parents or pursuant to valid agreement between the parties for care, maintenance and education of any unemancipated child under the age of twenty-one years." N.Y. Dom. Rel. Law secs. 236, 240 (McKinney 2003). In contrast, an award of "maintenance" shall terminate upon the death of either party in an action for divorce or upon the recipient's valid or invalid marriage. Id. sec. 236. Upon application of either party, a New York court may annul or modify any prior order or judgment as to maintenance or child support. Id.In the present case, Ms. McSkimming had physical custody of the children during the year in issue. 2004 Tax Ct. Summary LEXIS 24">*32  Moreover, she had remarried before 2000, and pursuant to the oral stipulation of June 28, 1996, one-half of any balance of maintenance payments became due at the time of her remarriage. Petitioner nevertheless continued to make payments of $ 400 per week in 2000. If such payments were for alimony or maintenance, as petitioner contends, his obligation to make such payments would have ended either under New York law or under the terms of the oral stipulation. His continuing to make payments after Ms. McSkimming's remarriage and her physical custody of the children are factors that militate in favor of characterizing such payments as for child support and not for alimony or separate maintenance.4 We sustain respondent's determination regarding this issue.2004 Tax Ct. Summary LEXIS 24">*33  Reviewed and adopted as the report of the Small Tax Case Division.To reflect the foregoing,Decision will be entered for respondent.  Footnotes1. Petitioner is uncertain of the year when Ms. McSkimming remarried, believing that her remarriage occurred sometime from 1996 to 1998.↩2. The record indicates that Ms. McSkimming did not include, in her Federal income tax return for the 2000 taxable year, any portion of this amount as gross income under secs. 61(a)(8) and 71(a)↩.3. Since there is no material factual dispute, we decide the issue in this case without regard to the burden of proof. See sec. 7491; Rule 142(a); Higbee v. Commissioner, 116 T.C. 438">116 T.C. 438↩ (2001).4. We realize that, of petitioner's three children, Brian was at least 21 years old during 2000 and that New York law defines child support as "a sum to be paid * * * for care, maintenance and education of any unemancipated child under the age of twenty-one years." N. Y. Dom. Rel. Law secs. 236, 240↩ (McKinney 2003) (emphasis added). However, under New York law, petitioner would still have to make child support payments at the full amount until he filed an application with a New York court and received approval to modify such payment amount. In any event, even if they were alimony payments, they would be voluntary and as such would still not be deductible by petitioner.