James M. Fidler v. Commissioner of Internal Revenue

Petitioner seeks review of a decision of the Tax Court holding that monthly payments made by petitioner to his former wife from April 1, 1944, to December 31, 1946, did not constitute periodic payments within the provisions of § 22 (k) of the Interna] Revenue Code, 26 U. S.C.A. § 22 (k) and therefore were not deductible by petitioner under the terms of § 23 (u).

On November 16, 1944, an amended decree of divorce was entered in favor of Ruth Law Fidler against James M. Fidler, who is here petitioner. The decree was in lieu of one rendered March 20, 1944, after trial of the divorce case in the District Court of the State of Nevada.

The amended decree contains the provision :

Two other clauses in the decree are of note in connection with this petition:

Pertinent clauses of the “Settlement Agreement” are set forth in the footnotes.

The lumping of the two payments of $300 per month and $500 per month, which, as the context of the present decree shows, are entirely separate and distinct in purpose and character, in a formal aggregate of $800 per month cannot avail to transmute the essentials. There was a manifest attempt to camouflage the design, but the history of the transaction…