Keck, Mary Ann, Transferee of the Estate of Arthur D. Shaw....... 313 Olson, Sidney L. and Miriam K., et al. (supplemental) 84 REPORTS OF THE TAX COURT OF THE UNITED STATES MARY JAMES WILSON, PETITIONER V. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT Docket No. 632-66. Filed October 16, 1967. Held, a separation agreement providing a single sum as support James H. Leeds, for the petitioner. WITHEY, Judge: The Commissioner has determined deficiencies in the income tax of petitioner for the taxable years 1961, 1962, and 1963 in the respective amounts of $479.06, $433.14, and $452.69. The sole issue to be determined is whether respondent has erred in including in petitioner's gross income amounts paid to her by her former husband during the above years pursuant to a written property settlement agreement. Due to concessions made by the parties on brief, other issues raised by the pleadings are no longer before us and those concessions will be given effect under Rule 50. FINDINGS OF FACT All stipulated facts are found. Mary James Wilson, petitioner herein, resides at San Francisco, Calif., and filed her 1961, 1962, and 1963 income tax returns with the district director of internal revenue, San Francisco, Calif. Petitioner and John P. Wilson entered into a property settlement and support agreement on March 12, 1957. She obtained a divorce from John P. Wilson on March 22, 1957, in the city of Juarez, Mexico. Thereafter, she obtained a decree from the Cook County Circuit Court, State of Illinois, on January 26, 1966. That court had never previously issued a decree of divorce or an order of support regarding the rights of petitioner or her former husband until the above decree was entered in 1966. 1 Petitioner has never resided in the State of Illinois. John P. Wilson was at the time of the action domiciled in the State of Illinois and appeared in person and through counsel and contested the action. The respondent has proposed to include as alimony income the following additional amounts received from John P. Wilson, pursuant to the support agreement, which were not included in the petitioner's income tax returns: 1961, $2,200, 1962, $2,100, 1963, $2,000. Additionally, the respondent included in petitioner's income in 1963, $48.41 which constitutes a premium for accident and health insurance for petitioner paid by her former husband pursuant to this agreement. The provision of the separation agreement which provides for the payments to be made by petitioner's former husband is as follows: 5. That during the lifetime of this agreement and during the lifetime of the wife, the husband shall pay to the wife at the address designated by her in writing, the sum of Three Hundred Dollars ($300.00) per month, payable by check or money order on the first day of each and every month, commencing with the first day of January, 1957 and monthly thereafter for the support and maintenance of the wife and the support, maintenance and education of the issue of the marriage. In the event of the wife's remarriage or decease, the payments shall be reduced to the sum of One Hundred Fifty Dollars ($150.00) per month. In the event of the emancipation, marriage or decease of either of the infant issue of the marriage, then the monthly sum above provided shall be reduced by the amount of Seventy-Five Dollars ($75.00) per month for each child so emancipated, married or deceased. The provision of the decree of the Circuit Court of Cook County, Ill., which relates to the above paragraph of the separation agreement is as follows: FIVE: That the THREE HUNDRED DOLLARS ($300.00) payment set forth in the agreement provided for Fifty percent (50%) of said payment or ONE HUNDRED FIFTY DOLLARS ($150.00) to be applied to alimony and Fifty percent (50%) of said payment or SEVENTY-FIVE DOLLARS ($75.00) per child or a total of ONE HUNDRED FIFTY DOLLARS ($150.00) be applied to child support. OPINION The parties are in agreement that the separation agreement made by petitioner and her former husband, in writing, on March 12, 1957, under which the payments here in controversy were made, does not comply as so made with section 71 (a) (2) and (b)1 of the Internal 1 SEC. 71. ALIMONY AND SEPARATE MAINTENANCE PAYMENTS. (a) GENERAL RULE. (2) WRITTEN SEPARATION AGREEMENT.-If a wife is separated from her husband and there is a written separation agreement executed after [August 16, 1954] the date of the enactment of this title, the wife's gross income includes periodic payments (whether or not made at regular intervals) received after such agreement is executed which are made under such agreement and because of the marital or family relationship (or which are attributable to property transferred, in trust or otherwise, under such agreement |