Basman Ahmad and Khitam Amerneh - Page 9

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          72(t)(2)(C).  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).  Thus, section               
          402(e)(1)(A) treats the alternate payee as the distributee, and             
          the alternate payee will be taxable on the distribution.  Here,             
          the marital settlement agreement is not a qualified domestic                
          relations order and does not designate an alternate payee.                  
          Furthermore, the distribution in question is a distribution to              
          Mr. Ahmad himself, the plan participant.  As the settlement                 
          agreement is not a qualified domestic order, and Mr. Ahmad is not           
          an alternate payee, the exception in section 72(t)(2)(C) is                 
               In light of the foregoing, the Court holds that petitioners            
          are liable for the 10-percent additional tax imposed under                  
          section 72(t).                                                              
               Reviewed and adopted as the report of the Small Tax Case               

                                             Decision will be entered                 
                                        for respondent.                               

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