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person who receives the distribution is not automatically the
distributee. Id. at 64-66.
Interpreting Darby, the Court in Powell v. Commissioner,
101 T.C. 489, 498 (1993), stated that "an owner was not
necessarily a distributee and [that Darby] specifically observed
that its statement that a 'distributee' had to be a participant
or beneficiary was not an exclusive definition of that word."
Applying the law as modified by REA '84, the Court found that the
plan participant's former spouse was the "distributee" and
thereby taxable on her share of the pension benefits. Id.
As illustrated by the aforementioned cases, most, if not
all, of the case law interpreting the term "distributee" dealt
with whether or not a spouse or former spouse with a legal
interest in a participant's pension benefits is a distributee
under section 402(a)(1) and thereby responsible for paying the
taxes on receipt of a distribution. A finding in each case
merely shifted tax liability between an employee/participant and
his or her spouse or former spouse. It did not insulate all
parties from tax liability.
The estate, relying on this case law, urges the Court to
adopt a novel interpretation which in effect would permit funds
to be distributed by a qualified plan without identifying any
distributee. We decline to accept this interpretation. We
conclude that the estate is a "distributee" within the meaning of
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