Larry Joe Mills - Page 7

                                        - 6 -                                         
          provision, a distribution to an "alternate payee" under a QDRO is           
          excepted from the additional tax on early distributions.  Section           
          402(e)(1)(A) provides that an "alternate payee" who is the spouse           
          or former spouse of the plan participant shall be treated as the            
          distributee of any distribution or payment made to the "alternate           
          payee" under a "qualified domestic relations order" as defined in           
          section 414(p).  Therefore, a distribution made to such an                  
          alternate payee under a QDRO will be taxable to that alternate              
          payee, and not to the plan participant, because section                     
          402(e)(1)(A) treats the alternate payee as the distributee.                 
               But it is not the distribution to his wife, the alternate              
          payee, that is under consideration here.  The distribution in               
          dispute is the distribution to petitioner himself.  Petitioner is           
          a distributee, the plan participant or beneficiary who, under the           
          plan, is entitled to receive the distribution.  See Darby v.                
          Commissioner, 97 T.C. 51, 58 (1991); Estate of Machat v.                    
          Commissioner, T.C. Memo. 1998-154; Smith v. Commissioner, T.C.              
          Memo. 1996-292.  As petitioner is not an "alternate payee", he              
          may not look to section 72(t)(2)(C) for relief.                             
               It does not appear that any of the statutory exceptions to             
          the application of section 72(t) apply in this case, and                    
          petitioner has not suggested otherwise.                                     

Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011