A phrase uttered much more earnestly than in Tax Court litigation sums up the characterization Judge Albert G. (“Scholar Al”) Lauber places on the much-amended and retitled aggregation of documents that sum up the property settlement agreement between Joseph Anthony Martino, Jr., T. C. Memo. 2024-18, filed 2/7/24, and his loved-once Ms. Roberts.

The facts are pre-TCJA, so alimony was still deductible.

Joe wants $600K of deductions for the last two years of this saga. Judge Scholar Al plows through the history of Joe’s defaults both in the property settlement agreement and other obligations, which led to mortgage foreclosure, bankruptcy, garnishees on Joe’s disability insurance proceeds, and continual visits to GA State courts to restart and ultimately unscramble this frittata.

At close of play, what started as “a marital settlement agreement (Settlement Agreement) addressing numerous issues, including the division of marital assets, child support, and ‘taxable periodic alimony’ to be paid by petitioner to Ms. Roberts,’ and which “specified an allocation of assets that was ‘meant to be an equitable division of the marital property, except as specifically provided herein, and said division is non-taxable to either party.,’” T. C. Memo. 2024-18, at p. 2, remained so.

For once, obligation to pay after death of payee is off the table. This time, it’s parsing the divorce or separation agreement per Section 71(b)(1)(B) to make sure its definition of alimony 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.” T. C. Memo. 2024-18, at p. 8.

Judge Scholar Al, a stickler for precise phraseology, winces slightly.

“Section 71(b)(1)(B) is drafted somewhat unartfully, containing as it does a double—indeed a triple—negative. Rephrased in simpler terms, this provision requires us to determine whether the instrument ‘contains a nonalimony designation.’ This inquiry is a practical, not a technical, one. The instrument ‘need not mimic the statutory language,’ e.g., by ‘specifically refer[ring] to sections 71 and 215.’ Rather, ‘the divorce or separation instrument contains a nonalimony designation if the substance of such a designation is reflected in the instrument.’” T. C. Memo. 2024-18, at p. 8 (Citations omitted).

Everything is coming up property, not alimony, until Joe tries arguing that the two (count ’em, two) State Court Income Deduction Orders (IDOs, which I called garnishees) on Joe’s disability insurance payments somehow converted those takeouts into alimony.

Not while Judge Scholar Al is on the case.

“Petitioner appears to equate the IDOs with ‘Domestic Relations Support Orders’ under Georgia law and says that IDOs cannot be used to effect an ‘equitable division of property.’ He offers no plausible support for this: The ‘equitable division of property’ was effected by the Settlement Agreement and the Divorce Decree. The IDOs did not divide any property. Rather, they were essentially orders of garnishment, i.e., a mechanism for ensuring that petitioner made the property settlement payments that the Superior Court had separately ordered him to make.” T. C. Memo. 2024-18, at p. 9, footnote 3.

Sorry, Joe, no go. As it was in the beginning, is now, and evermore shall be. Property without end.