Zampini v. Commissioner
| Decision Date | 13 August 1991 |
| Docket Number | Docket No. 3337-89. |
| Citation | 62 T.C.M. 475 |
| Parties | Dino G. Zampini v. Commissioner. |
| Court | U.S. Tax Court |
David F. Dunn, 640 Hamilton Mall, Allentown, Pa., for the petitioner. Keith L. Gorman, for the respondent.
Memorandum Findings of Fact and Opinion
Petitioner claims that certain payments he made in 1985 to his former wife and to third parties were alimony. Petitioner also claims head of household status for 1985 based on his son who lived with him for 3 months in 1985. As discussed below, we hold that portions of the direct and indirect payments petitioner made in 1985 are deductible as alimony, and that petitioner is not entitled to file as head of household for 1985.
In a deficiency notice dated November 18, 1988, respondent determined a $5,240.30 deficiency in petitioner's Federal income tax for 1985, and additions to tax for negligence under section 6653(a)(1) and (2)1 in the amount of $5 and 50 percent of the interest due on the deficiency. The deficiency resulted from respondent's disallowance of a $10,640 alimony deduction.
In an amended petition, petitioner claimed an overpayment of $1,581, based on an increased alimony deduction.
At trial, respondent moved to amend the pleadings to conform to the proof, seeking to challenge petitioner's claim of head of household status on his 1985 tax return. We granted the motion.
In the amended answer, respondent asserted an increase in deficiency to $10,847.85, and additions to tax of $542.39 under section 6653(a)(1) and 50 percent of the interest due on the total deficiency under section 6653(a)(2).
After concessions, the issues for decision are:
(1) Whether payments by petitioner to his former wife and to third parties in 1985 were alimony for Federal income tax purposes. We hold that a portion of the payments petitioner made directly to his former wife were alimony. In addition, concerning petitioner's indirect payments, we hold that: One-half of the principal mortgage payments that petitioner made on the marital home was alimony; no portion of the payments petitioner made in 1985 toward automobile insurance was alimony; and no portion of the telephone, cablevision, and utility payments which petitioner made for the marital home was alimony.
(2) Whether petitioner was entitled to file as a head of household on his 1985 tax return. We hold that he was not.
(3) Whether any of petitioner's underpayment of tax was attributable to negligence or intentional disregard of rules or regulations under section 6653(a)(1) and (2). We hold that the negligence addition of section 6653(a)(1) applies; as to section 6653(a)(2), we hold that it does not apply with respect to the alimony issue, but that it does apply with respect to the head of household issue.
Some of the facts have been stipulated and are so found.
Petitioner lived in Blandon, Pennsylvania, when the petition was filed.
Petitioner married Gloria Zampini in 1964. The Zampinis had three children: Michael, Christine, and Peter. In 1985 the children were ages 20, 18, and 14, respectively.
The Zampinis purchased a home in Scotia, New York, in 1977. They held title to it as tenants by the entirety and were jointly liable for the mortgage on the home.
The Zampinis separated in 1981 and were divorced in 1988. They entered into a written separation agreement in February 1981, the provisions of which were incorporated into the divorce decree.
The separation agreement gave petitioner and Mrs. Zampini joint custody of their children during the children's minority. It indicated that the children's principal residence was to be with Mrs. Zampini, but granted petitioner unlimited visitation rights.
The agreement enumerated the following financial obligations of petitioner to his family:
First, the agreement provided that petitioner pay "as a portion of his obligations for maintenance of the wife and child support the mortgage, taxes, insurance, telephone, cablevision and utility expenses" on the marital premises until: (1) The children's emancipation; (2) Mrs. Zampini's remarriage; or (3) Mrs. Zampini's death.
Second, the agreement required petitioner to make weekly payments to Mrs. Zampini consisting of $40 for her maintenance and $120 for child support. It specified that these weekly payments should include 40 percent of any salary increase petitioner received and 40 percent of his annual bonus, to be allocated 10 percent to alimony and 30 percent to child support.
The agreement obligated petitioner to provide child support until all three children were emancipated. It specified several events which would constitute emancipation. One of these events was "Permanent residence away from the residence of the mother." The agreement provided that residence at college would not constitute emancipation. The agreement also provided that employment would constitute emancipation as follows:
Engaging in full-time employment upon and after attainment of the child of the age of eighteen (18) years, except that (i) engaging by the child in partial, part-time or sporadic employment shall not constitute emancipation, and (ii) engaging by the child in full-time employment during vacation and summer periods shall not be deemed emancipation. Emancipation stemming from employment shall be deemed terminated and nullified upon the cessation by the child from full-time employment, unless the child shall be receiving unemployment benefits or the child shall be employable but is not actively seeking employment. The period, if any, from such termination until the earliest of any of the other events herein set forth shall, for all purposes under this agreement, be deemed a period prior to the occurrence of such emancipation.
Under the agreement, petitioner was responsible for paying the children's college expenses and all joint debts of the marriage incurred before the separation agreement. Petitioner was also responsible for insurance on a 1980 Mustang. Mrs. Zampini bought a new car, a Chrysler LeBaron, in 1984.
Petitioner lived in New York State from January through August 1985. During this time, he had homes at Gloversville and Sacandaga Lake. He lived in Florida for the remainder of 1985.
During the same year, Mrs. Zampini lived with her two younger children, Christine and Peter, at their home in Scotia, New York, where the children attended school. Christine and Peter spent their summer with petitioner at his home on Sacandaga Lake.
Prior to 1985, the Zampinis' eldest child, Michael, lived with his mother in Scotia, New York. From January until May 1985, Michael lived in an apartment about 10 miles from Schenectady County Junior College, where he attended school at night. Petitioner maintained this apartment for Michael. During this time, Michael worked full time during the day for Coleco Industries as a technician. Michael graduated with an associate's degree in May or June of 1985.
Michael lived with petitioner at the Sacandaga Lake home sometime between mid-May and mid-August 1985. After graduating, Michael worked part time for Coleco while looking for an engineering position. At this time, Michael did not intend to return to college. When he realized that he needed more education for this type of position, Michael began applying to 4-year colleges.
Michael was accepted at Brockport College during the summer of 1985. He began attending school there in the middle of August. At that time, he moved into an apartment close to the college which petitioner maintained for him. Michael lived at this apartment for the remainder of 1985.
During 1985, petitioner wrote 26 checks to Mrs. Zampini totaling $11,008.69. All but three were for $391.65. The exceptions were a $480.07 check dated January 11, a $471.65 check dated March 22, and a $1,050 check dated November 17. The November 17 payment was to reimburse Mrs. Zampini for the children's Christmas gifts, which petitioner and Mrs. Zampini purchased jointly.
In addition to his direct payments to Mrs. Zampini, petitioner made several payments to third parties in 1985. Petitioner paid $1,400.78 to New York Telephone Company (New York Telephone) for telephone service for the Scotia home and at least one of Michael's college apartments. Petitioner produced four statements from New York Telephone which were for the Scotia home and 11 checks which he wrote to New York Telephone in 1985. Ten of these checks contain the telephone number of the Scotia home and total $1,286.66.
Petitioner paid $1,796.54 to Niagara Mohawk Power Corporation (Niagara Mohawk), which provided utility services to the Scotia home, petitioner's Gloversville home, and at least one of Michael's college apartments. Petitioner produced three statements for utilities which specifically refer to the Scotia home. These statements total $783.34. In addition, petitioner wrote two checks to Niagara Mohawk in 1985, totaling $397.32, which show the account number of the Scotia home account and which are not payment for any of the three statements.
Petitioner also paid $240.60 to Jones Intercable, Inc., in 1985.
Petitioner paid $6,382.40 to Northeast Savings Bank in 1985. This amount was applied to the mortgage obligation on the Scotia home as follows: $1,345.23 as principal; $2,795.49 as interest; and $2,241.68 as property taxes.
Petitioner paid $1,949.50 to the Atlantic Companies which provided automobile insurance to Michael and to Mrs. Zampini.
Petitioner and his wife filed separate Federal income tax returns for 1985.
Petitioner claimed head of household status on his 1985 return. On Schedule A, petitioner claimed a $10,247 deduction for mortgage interest paid. This amount included: $1,397.74, representing one-half of the interest paid to Northeast Savings Bank for the Scotia home; and $1,182.11, representing interest...
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