Norton v. Comm'r of Internal Revenue, Docket No. 26573.

• Decision Date: 31 May 1951
• Docket Number: Docket No. 26573.
• Parties: RALPH NORTON, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
• Court: U.S. Tax Court

16 T.C. 1216

RALPH NORTON, PETITIONER,

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT

Docket No. 26573.

Tax Court of the United States.

Promulgated May 31, 1951.

Norman C. Parker, Esq., for the petitioner.

Marvin Hagen, Esq., for the respondent.

Pending a divorce proceeding brought by the petitioner, but in which his wife cross-petitioned for divorce, they agreed in writing that the petitioner should pay his wife $200 a month as alimony until her death or remarriage, and that ‘in addition to said monthly or periodic alimony‘ he should pay her forthwith $5,000 ‘additional alimony.‘ The $5,000 was paid the next day after divorce decree. The court decreed the $200 a month alimony but said nothing as to the $5,000. The agreement, though referred to as filed, was not made a part of the decree. Held, the $5,000 was not a periodic payment within the purview of section 22(k), Internal Revenue Code.

This case involves income taxes for the calendar year 1946. Deficiency was determined in the amount of $1,495.09. The only question presented is whether a payment by the petitioner to his ex-wife pursuant to a written settlement incident to a decree of divorce, is a ‘periodic payment‘ within the language of section 22(k) of the Internal Revenue Code.

FINDINGS OF FACT.

All facts were stipulated and are so found. The petitioner filed his Federal income tax return for the calendar year 1946 with the collector of internal revenue for the district of Kansas at Wichita, Kansas. So far as considered material, the stipulated facts may be summarized as follows: Petitioner filed a divorce action on January 23, 1946, against his wife, Hazel E. Norton. The wife filed an answer and crossbill praying for divorce and alimony. On May 7, 1946, while the divorce action was pending, petitioner and his wife entered into a written agreement entitled ‘Stipulation.‘ In material part the agreement provided that petitioner should pay his wife $200 a month as alimony, as long as she should live or until she remarried; that ‘in addition to said monthly or periodic alimony, the plaintiff (the petitioner)shall pay to defendant the sum of Five Thousand Dollars ($5,000.00) as additional alimony, payable forthwith‘; and that the court is requested to enter all proper and necessary orders and decrees in pursuance to or compatible with the agreement. The stipulation of agreement was filed in the divorce proceeding. On May 14, 1946, the court entered its decree granting the divorce to the wife and allowing her alimony in the sum of $200 a month until the further order of the court payable on the 7th day of each month, the first payment to be made forthwith. The decree recites: ‘Stipulation filed as of May 7th, 1946.‘ The decree does not refer to the $5,000, or otherwise to any agreement between the parties.

Pursuant to the stipulation and the decree of divorce the petitioner on May 15, 1946, in the sum of $5,000. In addition thereto the petitioner paid Hazel E. Norton during the remainder of 1946 the sum of $1,450 pursuant to the stipulation and decree providing alimony of $200 a month.

In his income tax return for 1946 petitioner claimed deduction of $6,750 for alimony payments, of which $300 was paid as temporary alimony prior to the entry of the divorce decree and $6,450 thereafter. The Commissioner in the notice of deficiency disallowed $5,300 of the claimed deduction.

OPINION.

DISNEY, Judge:

The petitioner does not urge error as to the $300 temporary alimony paid prior to the divorce but contends that the $5,000 was deductible as a periodic payment under section 22(k) of the Internal Revenue Code. Section 23(u) provides that in the case of a husband described in section 22(k) amounts includible under section 22(k) in the gross income of the wife are deductions allowable to him; while section 22(k) provides, in pertinent part, that if the wife is divorced ‘periodic payments (whether or not made at regular intervals) received subsequent to such a decree in discharge of * * * a legal obligation * * * imposed upon * * * such husband under such decree or under a written instrument incident to such divorce * * * shall be includible in the gross income of such wife * * * ‘ Our question is simply whether or not the $5,000 was a periodic payment. Petitioner argues, in effect, that it is such, adding that it can not be an installment payment which section 22(k) further provides shall not be considered periodic payments, because, he argues, an installment must be one ‘discharging a part of an obligation the principal sum of which is, in terms of money or property, specified in the decree or instrument * * * ‘— and neither the decree nor the instrument specified any principal sum of obligation. We think we need not be concerned with the provision as to installment for, after careful study of the cases cited, it is our opinion that the $5,000 is not a periodic payment. The parties to the divorce clearly did not so regard it for in their written agreement, after referring to the $200 a month alimony, they provided that ‘in addition to the monthly or periodic alimony‘ the petitioner, the plaintiff there, should pay $5,000 ‘as additional alimony, payable forthwith.‘ A distinction between periodic alimony and the $5,000, in the view of the husband and wife, is patent. The definition of ‘periodic‘ given by Webster's New International Dictionary includes ‘characterized by periods; occurring at regular stated times; happening, or appearing, at fixed intervals.‘ This describes the ‘monthly or periodic alimony‘ recited in the agreement, but in our opinion is inapplicable to the $5,000 which was ‘payable forthwith.‘ No part of it was paid by periods or fixed intervals. The petitioner argues that periodic payments need not be equal in amount or paid at regular intervals; and we agree. The statute specifically provides that they need not be at regular intervals. But this consideration does not settle our question.

We have studied the Congressional Committee...