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her interest. Petitioners contend, however, that the payments
petitioner received for her interest in Mr. Walton’s military
retired pay are not subject to income tax pursuant to the QDRO
and pursuant to statements allegedly made by the superior court
judge.11 Petitioners’ contentions are misplaced.
Petitioners assert that the QDRO states that “taxes shall be
taken out of ex-spouse’s allotment before Maria’s [petitioner’s]
share of allotment is given”. In essence, petitioners’ assertion
is consistent with the operative language of the QDRO. The QDRO
awarded petitioner as her sole and separate property a one-half
interest in the community property interest in Mr. Walton’s “net
disposable military retirement pay”. The QDRO defined “net
disposable military retirement pay” as “the net after deducting
* * * properly deducted Federal, State and [sic] income taxes”.
This definition is consistent with the plain language of 10
U.S.C. sec. 1408(a)(4)(C) (1988), as it was in effect when the
superior court entered both the final judgment and the QDRO. See
id. (disposable military retired pay is defined as the total
monthly retired pay less, inter alia, properly withheld Federal,
State, and local income taxes). Clearly, the QDRO directed that
11 Petitioners also contend that they have never reported
such payments on their tax returns since 1991 and that they never
received anything from the IRS until the 2000 audit. We note
that each tax year stands on its own and that the Commissioner
may challenge in a succeeding year what was overlooked or
condoned in previous years. Rose v. Commissioner, 55 T.C. 28,
31-32 (1970).
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