UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
decided: November 2, 1970.
MARTHA W. COLLORD FRYER, APPELLANT
COMMISSIONER OF INTERNAL REVENUE, APPELLEE
Waterman, Friendly and Feinberg, Circuit Judges.
Author: Per Curiam
Martha W. Collord Fryer appeals from a decision of the Tax Court, Tannenwald, J., holding that there was a deficiency of $228 for the year 1966. In that year, appellant received a total of $5,200 from her former husband pursuant to a separation agreement. The issue before the Tax Court was whether $2,600 of that amount should have been taxed to appellant as alimony or excluded from her income as child support. Although the Tax Court had "little doubt" that the parties intended "to provide $50 per week as alimony and $25 per week for the support of each of the two minor children," it held that the agreement failed to fix the latter amount with the specificity required by section 71(b) of the Internal Revenue Code. The Tax Court felt bound to reach this result by Commissioner v. Lester, 366 U.S. 299, 6 L. Ed. 2d 306, 81 S. Ct. 1343 (1961), which held that for the section 71(b) exclusion from gross income to apply, the instrument must "specifically designate" or "fix" the amount or portion to be applied to child support. The court below distinguished Commissioner v. Gotthelf, 407 F.2d 491 (2d Cir.), cert. denied, 396 U.S. 828, 90 S. Ct. 78, 24 L. Ed. 2d 79 (1969), where there was a rider to the separation agreement which transformed the allocation implicit in the main agreement into the specific designation required by section 71(b).
We agree with the Tax Court that the agreement in this case*fn1 does not meet the strict requirement of Lester, and that Gotthelf is distinguishable. Any reconsideration of Lester should come from the Supreme Court or Congress.