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$37,848 of petitioner’s distribution is at issue with respect to
the section 72(t) additional tax.
The funds were distributed to petitioner as a result of his
termination of employment. He does not contend that the
distribution was made due to death, disability, a series of
periodic payments, separation from service after attaining the
age of 55, or for the purpose of medical expenses. Petitioner
contends that the distribution is not subject to the section
72(t) additional tax because the distribution was made pursuant
to a qualified domestic relations order.
Section 72(t) provides for an additional tax of 10 percent
on any amount received as an early distribution from a qualified
retirement plan (as defined in section 4974(c)). The section
72(t) additional tax does not apply in certain situations and the
sole exception on which petitioner relies is section 72(t)(2)(C).
That section provides that distributions from qualified
retirement plans are not subject to the additional tax if they
are made to an alternate payee pursuant to a qualified domestic
relations order (QDRO) within the meaning of section 414(p)(1).
A QDRO is a domestic relations order which in pertinent part
(1) creates an alternate payee's right to receive all or part of
the benefits payable with respect to a participant under a plan,
(2) clearly specifies certain facts, and (3) does not alter the
amount of the benefits under the plan. Sec. 414(p)(1 )(A), (2),
and (3). A “domestic relations order” is defined in pertinent
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Last modified: May 25, 2011