___________________________

No. 21-2209 ___________________________

Andrew J. Redleaf

lllllllllllllllllllllAppellant

v.

Commissioner of Internal Revenue

lllllllllllllllllllllAppellee ___________________________

No. 21-2224 ___________________________

Elizabeth G. Redleaf

lllllllllllllllllllllAppellee

v.

Commissioner of Internal Revenue

lllllllllllllllllllllAppellant ____________

Appeals from The United States Tax Court ____________

Submitted: February 15, 2022 Filed: August 5, 2022 ____________ Before LOKEN, COLLOTON, and SHEPHERD, Circuit Judges. ____________ LOKEN, Circuit Judge.

Andrew Redleaf made deferred cash payments to his ex-wife Elizabeth pursuant to a marriage termination agreement providing that Elizabeth “waives any right to . . . permanent spousal maintenance.” Were those payments nonetheless “spousal maintenance” payments under Minn. Stat. § 518.552? We conclude the answer is clearly no and therefore affirm the decision of the United States Tax Court denying Andrew deductions under now-repealed alimony provisions of the Internal Revenue Code for $51M in cash payments he made to Elizabeth during his 2012 and 2013 federal income tax years.

I.

Andrew and Elizabeth1 married in 1984. Andrew initiated divorce proceedings in Hennepin County District Court in 2007. The marital properties were substantial. On February 4, 2008, after months of contentious litigation, Andrew and Elizabeth, represented by counsel, entered into and submitted to the District Court a Marital Termination Agreement (“MTA”) to resolve remaining financial issues. Two weeks later, the Court entered its Judgment and Decree dissolving the marriage under Minnesota law, approving the MTA, and incorporating many provisions of the MTA into the decree. The MTA provides that, if it is approved and the marriage dissolved, all terms “shall be made by reference a part of any decree issued.”

1 To avoid confusion, we will refer to Andrew and Elizabeth Redleaf by their first names.

-2- This dispute concerns deferred payments Andrew agreed to make to Elizabeth in 2012 and 2013. Andrew filed federal income tax returns claiming these were deductible “Alimony and separate maintenance payments” under 26 U.S.C. §§ 61(a)(8), 71(a)-(b), and 215(a). Elizabeth filed returns claiming the payments were nontaxable transfers of property incident to divorce. See 26 U.S.C. § 1041(a)(2), (c)(2). The Commissioner issued separate deficiency notices to Andrew, explaining he had not shown the payments “qualified as alimony,” and to Elizabeth, explaining payments to her “are includable in taxable income as alimony income.” Both petitioned the United States Tax Court for redetermination of their federal tax liabilities. Before the Tax Court, the Commissioner argued the payments were not alimony payments deductible by Andrew nor taxable income to Elizabeth, and therefore Elizabeth was entitled to summary judgment reversing this deficiency.

The Tax Court consolidated the cases and, agreeing with the Commissioner, granted summary judgment in favor of Elizabeth. Focusing on two of the four criteria that defined deductible alimony payments in § 71(b)(1), the Tax Court concluded (i) that Andrew’s obligation to make payments would have continued if Elizabeth had died before the final payment was due, 26 U.S.C. § 71(b)(1)(D); and (ii) that the MTA designated the payments as not includable in Elizabeth’s gross income and not deductible by Andrew, § 71(b)(1)(B). Later, based on the parties’ agreement that the two decisions need to be consistent, the Tax Court granted summary judgment in favor of the Commiss