The opinion
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[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 24-11438
Non-Argument Calendar
____________________
JOSEPH ANTHONY MARTINO, JR.,
Petitioner-Appellant,
versus
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.
____________________
Petition for Review of a Decision of the
U.S. Tax Court
Agency No. 17336-21
____________________
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2 Opinion of the Court 24-11438
Before NEWSOM, GRANT, and ANDERSON, Circuit Judges.
PER CURIAM:
Dr. Joseph Martino made certain divorce-related payments
to his ex-wife. On his federal tax returns for 2017 and 2018, Martino
claimed that those payments were deductible alimony. After the
IRS denied Martino’s claimed deductions, he filed a petition with
the United States Tax Court. The Tax Court granted summary
judgment in the IRS’s favor, and Martino appealed. Because Mar-
tino’s payments to his ex-wife do not meet the statutory criteria for
deductible alimony, we AFFIRM the Tax Court’s judgment.
I
A
This appeal hinges on a series of agreements and court or-
ders relating to Martino’s divorce from Cindy Roberts—which
means that some wind-up is necessary. Before Martino and Rob-
erts’s divorce was finalized, the former couple reached a settlement
agreement concerning their marital property. That agreement
stated that it was “meant to be an equitable division of the marital
property [that is] non-taxable to either party.” Among other things,
the agreement provided that Martino would gain sole possession
of the former couple’s marital residence in exchange for a $2.2 mil-
lion payment to Roberts. In a separate provision, the agreement
spelled out Martino’s obligation to pay Roberts $3,000 per month
“as taxable periodic alimony.” A few months later, a Georgia court
issued a final divorce decree that dissolved Martino and Roberts’s
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24-11438 Opinion of the Court 3
marriage. That decree incorporated the former couple’s settle-
ment agreement “as if quoted verbatim.”
A few months later, Martino and Roberts signed a consent
order that modified Martino’s obligations under the divorce de-
cree. In exchange for some concessions by Roberts, Martino now
agreed to pay his ex-wife $3.5 million for the marital residence—a
payment that Martino would make in three installments. The con-
sent order reiterated that these payments would be “tax-free” to
Roberts.
Martino failed to pay the second installment, prompting
Roberts to move for contempt and the court to enter another con-
sent order. That order required Martino to pay the second install-
ment with interest, and it directed Martino to execute a deed giving
Roberts the right to foreclose on the marital residence if Martino
failed to make the third installment. When the third installment
came due, Martino failed to pay it, and Roberts moved for con-
tempt again. This led the court to issue a contempt order requiring
Martino to make the $3 million payment by a specific date. But
shortly after the contempt order’s issuance, Martino filed for bank-
ruptcy. The marital residence was sold in Martino’s bankruptcy,
but the proceeds of that sale went to other creditors—not Roberts.
Martino received a bankruptcy discharge of various debts, but the
bankruptcy court ruled that Martino’s $3 million obligation to Rob-
erts was nondischargeable.
In a renewed effort to have Martino satisfy his debt to Rob-
erts, the Georgia court imposed a revised payment schedule that
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4 Opinion of the Court 24-11438
included one immediate payment and a series of monthly pay-
ments. Consistent with this new plan, the court issued two in-
come-deduction orders that directed Martino’s insurers to with-
hold specific sums (totaling $25,000) from Martino’s monthly disa-
bility insurance distributions and instead pay those sums directly to
Roberts. The income-deduction orders specified that the withheld
sums were “for the previously owed arrearage due to [Ms. Roberts]
in the amount of THREE MILLION DOLLARS ($3,000,000) plus
interest.” The court also directed Martino to maintain an irrevoca-
ble life insurance policy, with Roberts as sole beneficiary, “in an
amount equivalent to his outstanding obligation.”
Over the next six years, Martino made the monthly with-
holding payments to chip away at his $3 million obligation to Rob-
erts. But eventually, Martino became delinquent with regard to
other payments on which the former couple had settled, including
alimony. In response, the Georgia court issued another consent
order detailing how Martino’s payments were to be applied to his
various outstanding debts. Starting in October 2016, Martino’s
monthly $25,000 payments were first to go to the balances of five
obligations, including his past-due alimony of $27,000. When those
outstanding balances were satisfied, all succeeding payments
would go to the “outstanding balance due on the property division
payment that was in the original principal amount of $3 million,
plus interest.”
By the end of 2016, Martino’s monthly payments had dis-
charged the past-due amounts he owed Roberts for alimony, child
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24-11438 Opinion of the Court 5
support, and uninsured medical expenses. In both 2017 and 2018,
Martino continued to make the monthly payments, amounting to
$300,000 for each year. In 2017, Martino’s payments first applied
to his outstanding obligations to defray Roberts’s attorney’s fees
and to his court-ordered life insurance premiums—for a total of
$125,023. All other debts having now been satisfied, the rest
($174,977) went to the $3 million marital-residence debt—and so
did the entire $300,000 for 2018.
B
Martino filed late tax returns for both 2017 and 2018. His
2017 return claimed a $43,343 deduction for a net operating loss—
but no deduction for alimony. Martino later filed an amended 2017
return in which he claimed a $300,000 deduction for alimony, but
the IRS did not accept the amended return for filing. On his 2018
return, Martino again claimed a $300,000 alimony deduction.
The IRS selected Martino’s 2017 and 2018 returns for exam-
ination. Eventually, the agency issued Martino a notice of defi-
ciency, which disallowed Martino’s 2017 net-operating-loss deduc-
tion and his 2018 alimony deduction. In light of these rejected de-
ductions, the agency asserted that Martino owed an additional
$11,856 and $8,194 in taxes respectively for 2017 and 2018.
Martino petitioned the United States Tax Court to redeter-
mine his tax deficiencies. Martino eventually filed a motion for
summary judgment, arguing that he was entitled to $300,000
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6 Opinion of the Court 24-11438
alimony deductions for each of 2017 and 2018. 1 The Commis-
sioner of Internal Revenue objected to Martino’s motion and filed
a cross-motion for summary judgment, contending that the rele-
vant payments weren’t deductible alimony but instead constituted
nondeductible payments toward a marital property settlement.
The Tax Court ruled in the Commissioner’s favor. In the
court’s view, Martino’s payments did not meet the requirements
for deductible alimony as laid out in the Internal Revenue Code at
26 U.S.C. §§ 215 and 71. Accordingly, the Tax Court granted the
Commissioner’s summary-judgment motion and upheld Martino’s
tax deficiencies for 2017 and 2018.
This is Martino’s appeal.
II
The sole issue on appeal is whether Martino’s $300,000 pay-
ments in each of 2017 and 2018 qualified as deductible alimony.2
The taxpayer bears the burden of demonstrating that the IRS’s de-
ficiency determination is incorrect. Webb v. Comm’r, 872 F.2d 380,
381 (11th Cir. 1989); see Tax Ct. R. 142. Income-tax deductions are
matters of legislative grace, and taxpayers must comply with the
specific requirements for any deductions they claim. INDOPCO,
1 Martino does not contest the disallowed net-operating-loss deduction.
2 We review a decision from the Tax Court in the same manner and to the
same extent as a decision from a district court in a non-jury civil action.
26 U.S.C. § 7482(a)(1). We review the Tax Court’s legal conclusions de novo
and its factual findings for clear error. Long v. Comm’r, 772 F.3d 670, 675 (11th
Cir. 2014).
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24-11438 Opinion of the Court 7
Inc. v. Comm’r, 503 U.S. 79, 84 (1992). In short, “the taxpayer must
clearly establish his entitlement to a particular deduction.” Long v.
Comm’r, 772 F.3d 670, 678 (11th Cir. 2014) (citation and quotation
marks omitted).
For divorce or separation instruments executed before 2019,
the Internal Revenue Code distinguishes between alimony pay-
ments and transfers pursuant to a division of property. 3 Alimony
payments are deductible by the payor, 26 U.S.C. § 215(a), but taxa-
ble to the payee, id. §§ 61(a)(8), 71(a). By contrast, property trans-
fers “incident to the divorce,” including transfers by an equitable
division of marital property, are generally neither taxable nor de-
ductible. See id. § 1041(a)(2). Under § 71(b)(1), a cash payment con-
stitutes a deductible “alimony or separate maintenance payment”
only if it meets four requirements. See id. § 71(b)(1).
Section 71(b)(1)(B) lays out one of those requirements. 4 Un-
der that provision, a payment qualifies as deductible alimony only
if “the divorce or separation instrument does not designate such
payment as a payment which is not includible in gross income
3 The Tax Cuts and Jobs Act of 2017, Pub. L. No. 115-97, § 11051, 131 Stat.
2054, 2089–90, repealed the alimony deduction outlined in 26 U.S.C. §§ 215,
71, and 61(a)(8) as applied to divorce or separation instruments that were exe-
cuted or (in certain cases) modified after December 31, 2018. The divorce in-
struments at issue here were executed or modified before that date, so the
relevant provisions still apply.
4 Because § 71(b)(1)’s conditions are in the conjunctive and because we con-
clude that Martino’s payments do not satisfy § 71(b)(1)(B), we—like the Tax
Court—confine our analysis to that provision.
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8 Opinion of the Court 24-11438
under [section 71] and not allowable as a deduction under section
215.” Id. § 71(b)(1)(B). As the Tax Court observed, § 71(b)(1)(B) “is
drafted somewhat unartfully.” Martino v. Comm’r, T.C. Memo.
2024-18, at *8. Phrased another way, § 71(b)(1)(B) “treats a pay-
ment as nonalimony if the governing divorce or separation instru-
ment designates the payment as such.” Estate of Goldman v. Comm’r,
112 T.C. 317, 323 (1999), aff’d sub nom. Schutter v. Comm’r, 242 F.3d
390 (10th Cir. 2000).
As the “common usage” of the word “designate” indicates,
the governing divorce instrument “must contain a clear, explicit
and express direction” that the relevant payment does not consti-
tute alimony. Richardson v. Comm’r, 125 F.3d 551, 556 (7th Cir.
1997). But the document need not “mimic the statutory language”
or “specifically refer to sections 71 and 215”; instead, “the divorce
or separation instrument contains a nonalimony designation if the
substance of such a designation is reflected in the instrument.”
Goldman, 112 T.C. at 323. Compare id. at 323–24 (ruling that
monthly payments did not qualify as alimony under § 71(b)(1)(B)
where the divorce settlement agreement stated that the payments
“were ‘[i]n furtherance of the equitable division of property’” and
directed that the payments be “reported on the parties’ tax returns
as a nontaxable event”), with Richardson, 125 F.3d at 557 (conclud-
ing that payments did constitute deductible alimony under
§ 71(b)(1)(B) because the relevant document “d[id] not designate
that the payments to [the spouse] be tax-free”).
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24-11438 Opinion of the Court 9
Martino’s payments do not count as deductible alimony be-
cause the governing divorce instruments contain multiple “clear,
explicit and express direction[s] to that effect.” Richardson, 125 F.3d
at 556. Martino and Roberts agreed that Martino would hold on to
the marital residence and pay Roberts $2.2 million in return. The
former couple’s settlement agreement—incorporated verbatim by
the court’s divorce decree—specified that it was “meant to be an
equitable division of the marital property [that is] non-taxable to ei-
ther party.” Martino v. Comm’r, T.C. Memo. 2024-18, at *2 (empha-
sis added). The agreement had a separate clause obligating Mar-
tino to pay Roberts $3,000 per month “as taxable periodic ali-
mony.” Id.
The Georgia court later increased Martino’s obligation to
$3.5 million—divided into two $250,000 installments and a final $3
million payment. The court’s order confirmed yet again that Mar-
tino’s payments would be “tax-free to Ms. Roberts.” Id. at *9 (em-
phasis added). In the ensuing years, the court issued more orders
to address Martino’s failure to fulfill his obligation to Roberts—in-
cluding the two income-deduction orders that withheld Martino’s
monthly disability insurance distributions and redirected them to
Roberts. Those orders expressly stated that the withheld amounts
were “for the previously owed arrearage due to [Roberts] in the
amount of THREE MILLION DOLLARS.” Id.
After Martino paid the required sums for six years, he fell
behind on other obligations, prompting the final relevant consent
order. The court directed that the monthly $25,000 payments
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10 Opinion of the Court 24-11438
would first discharge five other debts and then go back to reducing
the “outstanding balance due on the property division payment
that was in the original principal amount of $3 million.” Id. at *10.
Consistent with this order, Martino’s 2017 payments first applied
to his outstanding obligations to defray Roberts’s attorney’s fees
and his court-ordered life insurance premiums—for a sum of
$125,023—which settled all of Martino’s other obligations.5 The
remaining $174,977 of the 2017 payments—and the full $300,000
for 2018—went to the $3 million marital residence settlement.
In sum, the governing divorce instruments contained multi-
ple nonalimony designations for the monthly payments that Mar-
tino made to Roberts in 2017 and 2018—from the settlement agree-
ment as incorporated by the divorce decree to the court’s income-
deduction orders and final consent order. Martino’s insistence to
the contrary lacks merit. Martino focuses mainly on the court’s
income-deduction orders, contending that those orders contained
no “statement that the payments [we]re not alimony or that the
payments w[ould] not be treated as income to Dr. Martino’s ex-
wife.” Appellant’s Br. at 10. Martino is incorrect twice over. The
income-deduction orders did make clear that they had nothing to
5 Martino did not argue for any potential alimony deduction based on the pay-
ments for Roberts’s attorney’s fees and the life-insurance premiums, so the
Tax Court considered that issue conceded. Martino does not dispute that con-
cession on appeal but instead continues to seek a $300,000 deduction for each
of 2017 and 2018. Martino has thus waived any argument based on these other
sums. See Miccosukee Tribe of Indians of Fla. v. Cypress, 814 F.3d 1202, 1210–11
(11th Cir. 2015).
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24-11438 Opinion of the Court 11
do with alimony but instead were targeted at Martino’s obligation
regarding the marital residence. More importantly, Martino is
wrong in his narrow focus on the income-deduction orders—
which are only part of the picture. The term “divorce or separation
instrument” includes both “a decree of divorce” and the “written
instrument[s] incident to such decree.” See 26 U.S.C. § 71(b)(2)(A).
Our analysis therefore must begin with the settlement agreement
as incorporated by the divorce decree, which clearly stated that
Martino’s debt for the marital residence was not alimony. See supra
at 9. The court’s later orders—including the income-deduction or-
ders—did not change but rather reaffirmed that obligation’s nature
by compelling Martino to honor it. The nonalimony designation
remained unchanged, which means that Martino’s payments do
not count as deductible alimony under § 71(b)(1)(B).
III
Martino’s 2017 and 2018 payments to Roberts did not meet
the statutory requirements for deductible alimony. We thus
AFFIRM the Tax Court’s judgment.