Court Opinion

ID: 4484606
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:16:52.112118+00
Date Added: 2024-06-11T15:03:42.143409
License: Public Domain

Parker, J., dissenting: I respectfully dissent from the majority opinion. It has been over 20 years since the Supreme Court instructed us to apply section 71(b) or its predecessor just as the Congress wrote it. Commissioner v. Lester, 366 U.S. 299 (1961). It has been over 15 years since this Court, in a case exactly like the present one, squarely held that an agreement where the allocation is stated to be "for tax purposes” or "for tax purposes only” does not "fix” or "specifically designate” an amount which is payable for child support within the holding of Lester. Talberth v. Commissioner, 47 T.C. 326 (1966). At this late date, we should not overrule Talberth and again unsettle one bit of solid ground in this much litigated morass of alimony versus child support. Moreover, in my opinion, the Talberth case was correctly decided and should be followed. Section 71(b) and the Lester case mandate that the agreement or court decree "fix” or "specifically designate” an amount of money or a part of the payment as a sum which is payable for child support. I agree with the majority that that does not require a showing that the amount payable for child support was so used; that is because our inquiry must be directed solely to the terms of the decree, instrument, or agreement, and we cannot resort to extrinsic evidence of any type. However, the decree, instrument, or agreement must do what the statute requires. In the Talberth case and in this case, the use of the language "for tax purposes” or "for tax purposes only” in the agreement (or court decree) showed that the parties did not really make the allocation they purported to make. I would follow Talberth here. The decree in the Talberth case and the first sentence of paragraph ninth (a) in this case provided that the wife was to receive all of the payments from the husband for the support of herself and the children. That is the classic Lester-type formulation making the entire amount taxable to the wife and deductible by the husband. Then the next sentence purports to make an allocation between alimony for the wife and support payments for the children but "for tax purposes.” In my opinion, that does not suffice to change the initial characterization. Lester requires that the writing on its face unequivocally "fix” or "specifically designate” the amount payable for child support. The majority’s interpretation of the parties’ intentions may be a reasonable one, but these matters cannot be left to inferences. The writing is ambiguous here, and, therefore, the Lester requirement is not met. I would hold that the agreement did not "fix” or "specifically designate” an amount as child support under Lester and section 71(b). Simpson, J., agrees with this dissenting opinion.