Commissioner of Internal Revenue v. Miller

This proceeding for review involves the construction of § 22 (k) of the Internal Revenue Code, 26 U.S.C.A. § 22 (k). The Commissioner determined income tax deficiencies for the years 1945 and 1946 against the taxpayer, who had been divorced from her husband in 1937. She had received periodic payments from the former husband in the taxable years in discharge of an obligation incurred by the husband under a written agreement entered into between the two- shortly prior to the divorce. The Tax Court on petition for redetermination disagreed with the Commissioner, and the latter has brought the case here. The question is whether the agreement was a written instrument “incident to” the divorce within the intendment of the section.

The facts as found by the Tax Court were these: In 1921 the taxpayer married Jared H. Miller, who was 20 years her senior, and lived with him for about 15> years. They resided at Fontana, California. In March 1936 the taxpayer-learned that Miller had been guilty of infidelity. Miller admitted the conduct and at first the two agreed to try to continue-living together and forget the other woman.. Miller had inherited from an earlier wife-an undivided interest…