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Discussion5
Generally, under section 402(a), a distribution from a
qualified retirement plan is taxable to the distributee.6
Neither the Code nor the regulations define the term
“distributee”. The Court, however, has construed the term to
mean the participant or beneficiary who, under the plan, is
entitled to receive the distribution. Darby v. Commissioner, 97
T.C. 51, 58 (1991); Estate of Machat v. Commissioner, T.C. Memo.
1998-154. In the present case, Mr. Kelley would be the
distributee because, under the Retirement Plan, he is the
participant or beneficiary who is entitled to receive the
distribution.
However, section 402(e)(1)(A) provides an exception to the
general rule of section 402(a). Thus, section 402(e)(1)(A)
provides that for purposes of section 402(a);
an alternate payee who is the spouse or former spouse
of the 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)).
5 We decide the issue in this case without regard to the
burden of proof. See generally sec. 7491(a); Rule 142(a);
INDOPCO Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Welch v.
Helvering, 290 U.S. 111, 115 (1933).
6 Neither party has raised any issue regarding the
qualified status of the Retirement Plan. Suffice it to say that
there is nothing in the record that would lead us to think that
the employees’ trust is not described in sec. 401(a) and not
exempt from tax under sec. 501(a).
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Last modified: May 25, 2011