CourtListener opinion 11204914

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United States Tax Court

 T.C. Memo. 2025-120

 JOHN DITULLIO,
 Petitioner

 v.

 COMMISSIONER OF INTERNAL REVENUE,
 Respondent

 __________

Docket No. 4049-23. Filed November 18, 2025.

 __________

Christine S. Speidel and Amy M. Feinberg, for petitioner.

Michael D. Kohanim, James P.A. Caligure, and Brian E. Peterson, for
respondent.

 MEMORANDUM FINDINGS OF FACT AND OPINION

 MARSHALL, Judge: Respondent issued petitioner a Notice of
Deficiency (Notice) in which he determined a deficiency of $12,000 and
a section 6662(a) 1 accuracy-related penalty of $2,400 with respect to
petitioner's 2020 tax year. Respondent has since conceded the section
6662(a) accuracy-related penalty. Therefore, the sole issue for decision
is whether petitioner's $50,000 payment to his ex-wife was alimony
under section 71(b)(1). As discussed below, we conclude that it was not
alimony as defined in section 71(b)(1) and, therefore, is not deductible
under section 215(a).

 1 Unless otherwise indicated, statutory references are to the Internal Revenue

Code, Title 26 U.S.C., in effect at all relevant times, and Rule references are to the Tax
Court Rules of Practice and Procedure.

 Served 11/18/25
 2

[*2] FINDINGS OF FACT

 Some of the facts have been stipulated and are so found. The First
Stipulation of Facts, the Second Stipulation of Facts, and the
accompanying Exhibits are incorporated herein by this reference.
Petitioner resided in New Jersey when he filed his Petition.

 Petitioner and Lisa M. Lopez were married from 2005 to 2017. 2
During their marriage and until 2013, petitioner was an electrician
employed by the State of New Jersey. In 2013, he sustained a severe
injury at work and was permanently disabled. In 2014, petitioner
applied for a disability pension claim to the board of trustees (Board) of
the New Jersey Public Employees' Retirement System (PERS). In a
letter dated March 18, 2020 (Decision Letter), the Board adopted the
conclusion of an administrative law judge that petitioner was totally and
permanently disabled from performing his regular and assigned duties
and approved petitioner for ordinary disability retirement benefits
effective as of July 1, 2014. When petitioner applied for benefits in 2014,
he selected the "Maximum Option" under the PERS regulations which
provided him with the highest possible monthly income but with no
survivor benefits.

 On March 22, 2017, petitioner and Ms. Lopez signed a Final
Judgment of Divorce (FJOD) in the State of New Jersey. Ms. Lopez was
represented by Robert S. Greenberg 3 in the divorce. Petitioner was
unrepresented because he could not afford an attorney. Petitioner was
comfortable with Mr. Greenberg's drafting the divorce documents for
them because he and Ms. Lopez tried to make the divorce as fair as
possible. Paragraph 6 of the FJOD provides:

 Husband has pension benefits earned while an employee
 with the State of New Jersey. A Qualified Domestic
 Relations Order (QDRO) shall be prepared and the cost for
 preparation shall be shared by both parties. Husband has
 an application currently pending for a disability pension
 retroactive to the date of his disability. In the event that
 Husband receives retroactive benefits, Wife shall be
 entitled to share in those retroactive benefits; however, the
 amount of her benefits shall be limited to the amount that

 2 During their marriage Ms. Lopez was known as Lisa M. DiTullio.

 3 Mr. Greenberg was a New Jersey family law attorney with over 30 years of

experience.
 3

[*3] she would otherwise be entitled to based upon a calculation
 of Husband's ordinary retirement benefits.

Petitioner understood that paragraph 6 of the FJOD entitled Ms. Lopez
to a portion of his single lump-sum retroactive pension payment. As
indicated in paragraph 6 of the FJOD, Ms. Lopez was supposed to
receive her share of the pension payment through a QDRO. Petitioner
paid his share of the fee to draft the QDRO to Mr. Greenberg; however,
Ms. Lopez did not, and no QDRO was ever prepared. Petitioner's
understanding was that if a QDRO had been executed, it would have
been served on the New Jersey Department of Pensions; thereafter,
when petitioner received a pension payment, the Department of
Pensions would have directly paid Ms. Lopez the amount agreed to in
the QDRO.

 As a result of the Decision Letter, petitioner received a single
lump-sum retroactive pension distribution of $156,564 covering the
retroactive period from July 2014 until his disability pension claim was
approved in 2020. Additionally, in July 2020, petitioner began receiving
a monthly disability pension. After petitioner received the Decision
Letter, he informed Ms. Lopez of the Board's decision and told her that
he would pay her as they had agreed in the FJOD. Through these
discussions, they agreed that petitioner would pay Ms. Lopez a single
lump-sum payment of $50,000 with no further obligations. Petitioner
hired an attorney to draft a Consent Order to memorialize their
agreement. The Consent Order provided that paragraph 6 of the FJOD
was amended to provide:

 John DiTullio shall give Lisa Lopez $50,000 of his
 retroactive disability benefits as full satisfaction of any
 entitlement [Ms. Lopez] might be owed pursuant to
 paragraph 6 of the Final Judgment of Divorce. No Qualified
 Domestic Relations Order shall be necessary as husband
 has received the check from PERS and will provide wife
 with payment upon receipt of signed and notarized consent
 order. John DiTullio shall have no other obligation to share
 any pension benefit with Lisa Lopez.

Petitioner and Ms. Lopez executed the Consent Order on June 9, 2020,
at his attorney's office. Concurrently with signing the Consent Order,
petitioner gave Ms. Lopez a check for $50,000. Petitioner wrote
"Equitable Pension Distribution – Lump Sum" in the memo line of the
check. There were no periodic payments or monthly payments to
 4

[*4] Ms. Lopez other than the $50,000 payment described in the
Consent Order. Neither the FJOD nor the Consent Order referenced
maintenance or alimony or that petitioner's obligation to pay her a share
of the retroactive pension payment ceased at Ms. Lopez's death.

 Petitioner hired a tax preparer for his Form 1040, U.S. Individual
Income Tax Return, for 2020. The tax preparer told petitioner that he
could deduct the $50,000 payment as alimony or a separate maintenance
payment under section 215(a). Petitioner timely filed the Form 1040 for
the 2020 tax year. On November 30, 2022, respondent issued petitioner
the Notice and disallowed the alimony deduction.

 OPINION

I. Burden of Proof

 Generally, the Commissioner's determination of a taxpayer's
liability in a Notice of Deficiency is presumed correct, and the taxpayer
bears the burden of proving that the determination is incorrect. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Deductions are a
matter of legislative grace, and the taxpayer bears the burden of proving
entitlement to any deduction claimed. Rule 142(a); INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering,
292 U.S. 435, 440 (1934). 4 Petitioner seeks to deduct the $50,000
payment to Ms. Lopez as alimony. In order to do so he must prove that
it was alimony within the meaning of sections 71(a) and 215(a).

II. Definition of Alimony

 Section 215(a) allows a deduction to the paying spouse for the
alimony or separate maintenance payments made during the paying
spouse's tax year that are includible in the recipient spouse's gross
income under section 71(a). 5 See § 215(b); see also 62(a)(10). The

 4 Section 7491(a)(1) provides that the burden of proof may shift to the
Commissioner when the taxpayer has introduced credible evidence with respect to any
factual issue relevant to ascertaining the liability of the taxpayer for any tax. See also
§ 7491(a)(2). Because petitioner did not argue or prove that the requirements of section
7491(a) have been met, the burden of proof does not shift to respondent.
 5 Congress repealed sections 62(a)(10), 71, and 215 for all divorce or separation

agreements executed after December 31, 2018, and for certain divorce or separation
agreements modified after that date. Tax Cuts and Jobs Act of 2017 (TCJA), Pub. L.
No. 115-97, § 11051, 131 Stat. 2054, 2089–90. More specifically, TCJA § 11051(c), 131
Stat. at 2090, provided the following effective date with respect to this repeal:
 5

[*5] characterization of payments in a divorce or separation instrument
as alimony or property settlement is not controlling. See Baker v.
Commissioner, T.C. Memo. 2000-164, 2000 WL 656708, at *4. Whether
a payment constitutes alimony within the meaning of sections 71(a) and
215(a) is determined by reference to section 71(b)(1), which provides:

 Sec. 71(b). Alimony or separate maintenance
 payments defined.—For purposes of this section—
 (1) In general.—The term "alimony or
 separate maintenance payment" means any
 payment in cash if—
 (A) such payment is received by (or on
 behalf of) a spouse under a divorce or
 separation instrument,
 (B) the divorce or separation
 instrument 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,
 (C) in the case of an individual legally
 separated from his spouse under a decree of
 divorce or of separate maintenance, the payee
 spouse and the payor spouse are not members
 of the same household at the time such
 payment is made, and

 (c) Effective Date.—The amendments made by this section
 shall apply to—
 (1) any divorce or separation instrument (as defined in
 section 71(b)(2) of the Internal Revenue Code of 1986 as in
 effect before the date of the enactment of this Act [Enacted:
 Dec. 22, 2017]) executed after December 31, 2018, and
 (2) any divorce or separation instrument (as so defined)
 executed on or before such date and modified after such date if
 the modification expressly provides that the amendments
 made by this section apply to such modification.
The FJOD was executed before December 31, 2018. It is unclear whether the Consent
Order, which was executed after December 31, 2018, was a modification of the FJOD
as that term is used in TCJA § 11051(c)(2) or merely an implementation of the parties'
agreement in the FJOD. However, even if the Consent Order was a modification of the
FJOD, it does not expressly provide that the amendments made by TCJA § 11051 apply
to the Consent Order. Thus, the repeal does not apply to this case. For simplicity, this
Memorandum Opinion refers to the Consent Order as amending paragraph 6 of the
FJOD.
 6

[*6] (D) there is no liability to make any
 such payment for any period after the death
 of the payee spouse and there is no liability to
 make any payment (in cash or property) as a
 substitute for such payments after the death
 of the payee spouse.

 In 1984 Congress enacted section 71, in its pre-TCJA repeal form,
specifically to "eliminate the subjective inquiries into intent and the
nature of payments that had plagued the courts in favor of a simpler,
more objective test." Hoover v. Commissioner, 102 F.3d 842, 844–45 (6th
Cir. 1996), aff'g T.C. Memo. 1995-183. If all four conditions in section
71(b)(1) are met, then a payment is deductible alimony. Jaffe v.
Commissioner, T.C. Memo. 1999-196, 1999 WL 398130, at *4. However,
if any one or more of them is not met, then the payment is not deductible
alimony. Id.

III. Section 71(b)(1)(D)

 The parties do not dispute that petitioner's payment satisfies the
conditions in section 71(b)(1)(A), (B), and (C). But respondent contends
that the payment fails to meet the fourth condition, in section
71(b)(1)(D), because petitioner remained liable to make the payment in
the event of his ex-wife's death. Specifically, respondent argues that the
payment to Ms. Lopez was an equitable distribution of property because
the FJOD and the Consent Order did not mention alimony or
maintenance and did not provide that the payment obligation in
paragraph 6 of the FJOD terminated at Ms. Lopez's death. Respondent
also argues that New Jersey caselaw supports his position that
paragraph 6 of the FJOD was a division of marital property subject to
New Jersey's equitable distribution statute and caselaw. 6 Additionally,
respondent argues that the pension payment was an equitable
distribution because it was earned during the years that coincided with

 6 Specifically, respondent argues that New Jersey caselaw treats pensions that

have been contributed to during the marriage by either partner as marital property
subject to division under New Jersey's equitable distribution statute. See Kikkert v.
Kikkert, 427 A.2d 76, 79–80 (N.J. Super. Ct. App. Div. 1981), aff'd per curiam, 438 A.2d
317 (N.J. 1981); Weir v. Weir, 413 A.2d 638, 640 (N.J. Super. Ct. Ch. Div. 1980). We do
not address this argument as we have repeatedly held that classification of a payment
under state law does not preclude it from being alimony for federal income tax
purposes. See Proctor v. Commissioner, 129 T.C. 92, 95 (2007) (citing Benedict v.
Commissioner, 82 T.C. 573, 577 (1984)). Rather, below we analyze whether the
payment satisfied the requirements under section 71(b)(1)(D) as informed by our
caselaw.
 7

[*7] the DiTullios' marriage and the parties' actions indicate that they
considered it an equitable distribution of a marital asset. Finally,
respondent argues that the PERS regulations, which petitioner relies on
as discussed below, do not apply because no QDRO was executed and
served on and accepted by PERS.

 Petitioner counters that the FJOD "should be read to encompass
a termination upon death condition because it unambiguously provides
for a [QDRO]." Petitioner further argues that because the FJOD
unambiguously provides for a QDRO, it supports the conclusion that the
parties understood that the PERS regulations would be followed,
including the PERS regulation which states that "[a]ll withholdings
mandated under a matrimonial order shall cease upon the death of
either the retired member or the alternate payee." N.J. Admin. Code
§ 17:1-1.12(c) (2009). Finally, petitioner argues that the Consent Order
does not change the analysis that petitioner would not remain liable to
make the payment in the event of Ms. Lopez's death because the
Consent Order is best viewed as a satisfaction of the FJOD, which
incorporated the limitations of PERS. As discussed below, we hold that
petitioner remained liable to make the payment in the event of his ex-
wife's death. Therefore, the $50,000 payment did not meet the
requirements of section 71(b)(1)(D) and did not qualify as deductible
alimony.

 To meet the requirements under section 71(b)(1)(D), the payor
must have no liability to make the payments after the death of the payee
spouse. See Kean v. Commissioner, 407 F.3d 186, 191 (3d Cir. 2005), aff'g
T.C. Memo. 2003-163. "If the divorce instrument is silent as to the
existence of a postdeath obligation, the requirements of section
71(b)(1)(D) may still be satisfied if the payments terminate upon the
payee spouse's death by operation of State law." Stedman v.
Commissioner, T.C. Memo. 2008-239, 2008 WL 4704143, at *2 (citing
Johanson v. Commissioner, 541 F.3d 973, 977 (9th Cir. 2008), aff'g T.C.
Memo. 2006-105). However, if State law is ambiguous on this point, a
"federal court will not engage in complex, subjective inquiries under
state law; rather, the court will read the divorce instrument and make
its own determination based on the language of the document." Hoover,
102 F.3d at 846; see also Kean v. Commissioner, 407 F.3d at 191; Okerson
v. Commissioner, 123 T.C. 258, 264–65 (2004); Logue v. Commissioner,
T.C. Memo. 2017-234, at *8–9; Stedman v. Commissioner, 2008 WL
4704143, at *2.
 8

[*8] The parties agree that the FJOD and the Consent Order are silent
as to whether the payment obligation in paragraph 6 of the FJOD would
terminate in the event of Ms. Lopez's death. Thus, we must consider
whether the payment obligation would terminate by operation of New
Jersey State law. Respondent states that New Jersey State law is
ambiguous as to the termination of payments upon a payee's death when
there is no unambiguous termination provision in the divorce
instrument. Petitioner counters that the payment obligation would have
terminated under New Jersey State law because the reference to a
"QDRO" in paragraph 6 of the FJOD incorporated the PERS regulation
which provides that withholdings under a matrimonial order will cease
upon the death of a payee spouse. Petitioner's reliance on the PERS
regulations is misplaced because a predicate for their application was
that the parties would prepare and execute a QDRO. We do not think
that simply referring to a QDRO in paragraph 6 of the FJOD
automatically incorporated the PERS regulations and the termination
rule that petitioner relies on.

 Setting aside the PERS regulations, which we found do not apply
in this case, New Jersey law is silent as to whether the obligation to
make maintenance payments terminates on the death of the payee
spouse when there is no unambiguous termination provision in the
divorce instrument. The parties point us to no caselaw, and we have
discovered none, that expressly states whether the obligation of
maintenance terminates upon the death of the payee spouse. Thus, New
Jersey State law is ambiguous as to the termination of payments upon
the payee's death.

 Because New Jersey State law is ambiguous on whether the
payment obligation would have terminated upon the payee's death, we
must analyze the FJOD and the Consent Order and make our own
determination based on the terms of the documents. Paragraph 6 of the
FJOD stated that petitioner had pension benefits earned while he was
an employee for the State of New Jersey and that he had a pending
application for a disability pension retroactive to the date of his
disability. It further stated that if he received those benefits, then
Ms. Lopez would be entitled to a share of the retroactive benefits. The
FJOD also stated that a QDRO "shall be prepared" and the cost for
preparation shall be shared by both parties. Notably, it did not discuss
or refer to Ms. Lopez's potential share of petitioner's pension benefits as
alimony or maintenance or indicate that his payment obligation to her
under paragraph 6 would terminate upon her death.
 9

[*9] The Consent Order stated that the parties agreed that "John
DiTullio shall give Lisa Lopez $50,000 of his retroactive disability
benefits as full satisfaction of any entitlement [Ms. Lopez] might be
owed" under paragraph 6 of the FJOD. It continued that no QDRO was
necessary and that he would "provide wife with payment upon receipt of
signed and notarized consent order." It concluded with the statement
that he had no other obligation to share any pension benefit with her.
Similar to paragraph 6 of the FJOD, the Consent Order did not discuss
or refer to the payment as alimony or maintenance or indicate that his
payment obligation to her would terminate upon her death.

 We read the plain text of paragraph 6 of the FJOD, as amended
by the Consent Order, to create an obligation that survived the death of
the recipient spouse. In Webb v. Commissioner, T.C. Memo. 1990-540,
60 T.C.M. (CCH) 1024, 1027, the Court was asked to decide whether an
obligation containing the phrase "[t]he Husband shall pay" created an
obligation which survived the death of the recipient spouse.
Highlighting the fact that "the statute speaks in terms of ‘liability,'" we
held that the above-quoted phrase "[u]nquestionably . . . created a
liability which would have been enforceable by [the recipient spouse's]
estate had she died after the execution of the agreement but before the
payments were actually made." Id.

 Here, paragraph 6 of the FJOD stated that if petitioner received
the retroactive disability benefits, "Wife shall be entitled to share in
those retroactive benefits . . . limited to the amount that she would
otherwise be entitled to based upon a calculation of [petitioner's]
ordinary retirement benefits." Similarly, the Consent Order stated that
"John DiTullio shall give Lisa Lopez $50,000 of his retroactive disability
benefits as full satisfaction of any entitlement [Ms. Lopez] might be
owed" under paragraph 6 of the FJOD. 7 Thus, while paragraph 6 of the
FJOD may have created a conditional obligation that if petitioner
received retroactive disability benefits he would pay Ms. Lopez a share
of those benefits, the execution of the Consent Order made petitioner's
obligation to pay Ms. Lopez $50,000 of the retroactive disability benefits
that he received, unqualified. The plain text of paragraph 6 of the FJOD
and the Consent Order closely resembles the text that we considered in

 7 The Consent Order further provides that "no [QDRO] shall be necessary as

husband has received the check from PERS and will provide wife with payment upon
receipt of signed and notarized consent order." The contractual phrase "will provide
wife with payment" is also similar to the obligation that we considered in Webb and
indicates that the Consent Order created a liability that would have survived
petitioner's ex-wife's death.
 10

[*10] Webb. We think that the phrase "Wife shall be entitled" in
paragraph 6 of the FJOD and the phrase "John DiTullio shall give Lisa
Lopez $50,000" in the Consent Order, are sufficiently similar to the text
in Webb, 60 T.C.M. (CCH) at 1027 ("The Husband shall pay."), that when
the agreements are read together these phrases created an obligation
which survived the death of the recipient spouse.

 Petitioner argues that the preexisting FJOD distinguishes this
case from Webb because the obligation to pay arose under the FJOD,
"which incorporated the limitations of PERS." Petitioner's attempt to
distinguish this case from Webb is unconvincing. As discussed above, the
limitations of PERS were not incorporated into the FJOD. Additionally,
paragraph 6 of the FJOD created a conditional obligation to pay Ms.
Lopez that crystalized only when the parties executed the Consent
Order. The plain text of the FJOD as amended by the Consent Order,
created a liability that would have been enforceable by his ex-wife's
estate if she had died after executing the agreement but before the
payment was made. Therefore, petitioner's obligation to make the
payment at issue survived the death of his ex-wife, and that payment
was not alimony under section 71(b)(1) or deductible under section
215(a).

 We have considered all other arguments made and facts
presented in reaching our decision, and, to the extent not discussed
above, we conclude that they are moot, irrelevant, or without merit.

 To reflect the foregoing,

 Decision will be entered for respondent with respect to the
deficiency, and for petitioner with respect to the section 6662(a) penalty.