In Fryer v. Commissioner of Internal Revenue, 434 F.2d 67 (2d Cir. 1970), the Second Circuit held a substantially identical support agreement to lack the specificity required by § 71(b) and Lester. Ms. Brock argues that Commissioner of Internal Revenue v. Gotthelf, 407 F.2d 491 (2d Cir. 1969), cert. denied, 396 U.S. 828, 90 S.Ct. 78, 24 L.Ed.2d 79 (1969), and West v. United States, 413 F.2d 294 (4th Cir. 1969), compel a contrary result. The divorce decrees in both cases contained clauses providing for a reduction in the payment if the wife remarried or a child reached the age of 21. Unlike the instant case, however, the agreements at issue in both Gotthelf and West contained additional language found sufficient to fix the amount of child support payments.
366 U.S. at 302-303, 81 S.Ct. 1343. Nevertheless Lester requires only words of designation, not words of obligation. No talismanic rubric is demanded; only specification of a certain amount, as here, for child support is needed. Support for our conclusion is found in Commissioner of Internal Revenue v. Gotthelf, 407 F.2d 491 (2 Cir. 1969). There a separation agreement called for a husband to pay $12,000 per year to his divorced wife and two minor children. If she remarried the total was to be reduced by $5,000, and if a child married or reached 21 in age, a $3,500 reduction followed.
See also Mass v. Commissioner Dec. 40,367, 81 T.C. [49 TCM (CCH) 279] 112, 122-123 (1983). Likewise, extrinsic evidence of the actual use of the payments by their recipient, the later conduct of the parties, and the importance to the parties of the tax consequences under sections 71 and 215 is irrelevant to the Lester inquiry. Mass v. Commissioner, supra at 123; Gotthelf v. Commissioner Dec. 28,571, 48 T.C. 690, 694 (1967), affd. 69-1 USTC ¶ 9208 407 F. 2d 491 (2d Cir. 1969); Grummer v. Commissioner Dec. 28,086, 46 T.C. 674, 679 (1966). Since it is Charlotte who is contending that a part of the payments received from Carl during the taxable years 1979 and 1980 meets the requirements of Lester with respect to child support, we will turn our attention to her arguments.
However, soon after our decision in Talberth, we held that a simple rider to a separation agreement fixed an amount payable for child support, even though the rider and the agreement did not obligate the recipient spouse to spend the moneys for the children. Gotthelf v. Commissioner, 48 T.C. 690 (1967), affd. 407 F.2d 491 (2d Cir. 1969). Then, in West v. United States, 413 F.2d 294 (4th Cir. 1969), the Fourth Circuit decided that a separation agreement clause, pursuant to which the recipient spouse “undertook” to spend a certain amount for the children, also sufficiently fixed an amount for purposes of section 71(b), even though the clause and agreement did not obligate the recipient to spend the moneys on the children.
However, soon after our decision in Talberth, we held that a simple rider to a separation agreement fixed an amount payable for child support, even though the rider and the agreement did not obligate the recipient spouse to spend the moneys for the children. Gotthelf v. Commissioner, 48 T.C. 690 (1967), affd. 407 F.2d 491 (2d Cir. 1969). Then, in West v. United States, 413 F.2d 294 (4th Cir. 1969), the Fourth Circuit decided that a separation agreement clause, pursuant to which the recipient spouse "undertook" to spend a certain amount for the children, also sufficiently fixed an amount for purposes of section 71 (b), even though the clause and agreement did not obligate the recipient to spend the moneys on the children.
However, unless the amount of each payment allocable to child support is specifically designated in the decree, the entire sum paid for the support of the wife and children is includable in the wife's gross income as alimony. Commissioner v. Lester, 366 U.S. 299 (1961); Sara Nicoll Gotthelf, 48 T.C. 690 (1967), affd. 407 F.2d 491 (2d Cir. 1969). It is the respondent's position that amounts paid by the petitioner from the date of the support order up to the date of the divorce decree are alimony includable by Rywka Wolman in income and deductible by the petitioner.
Nevertheless, we think that the thrust of the decision is clear and that this constitutes a sufficient designation to make concerned. Compare Sara Nicoll Gotthelf, 48 T.C. 690 (1967), affd. 407 F.2d 491 (C.A. 2, 1969), certiorari denied 396 U.S. 828 (1969). Such being the case, the payments must be applied to child support.
Pursuant to the terms of the agreement, if it were to be established by adjudication or by change of law that such payments could not be deducted by the husband, there was to be a reduction. Defendant argued that plaintiff's remarriage made that provision operative. It is firmly established that where the language of a separation agreement does not specifically delineate that portion of a support payment which is for the children, the entire payment will be considered alimony and taxable to the wife ( Commissioner v. Lester, 366 U.S. 299; Brock v. Commissioner of Internal Revenue, 566 F.2d 947; Fryer v Commissioner of Internal Revenue, 434 F.2d 67; West v. United States, 413 F.2d 294; Commissioner v. Gotthelf, 407 F.2d 491, cert den 396 U.S. 828; US Code, tit 26, § 71, subd [b]). Defendant contends that once plaintiff remarried, his payments automatically became "fixed" as child support and therefore nondeductible. There is no requirement under either New York law or the Internal Revenue Code for such an interpretation (see Tax Law, §§ 359, 360; US Code, tit 26, § 71, subds [a], [b]).