Lee E. Seidel - Page 15

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               The parties are in agreement that petitioner’s CWSC 401(k)             
          plan meets the requirements of section 401(a).  That being so,              
          distributions from the CWSC 401(k) plan are governed by section             
               Respondent relies on Powell v. Commissioner, 101 T.C. 489              
          (1993), in arguing that the funds distributed through the QDRO              
          remained community property and should be taxed as an indirect              
          distribution.  Interpreting Darby v. Commissioner, supra, the               
          Court in Powell v. Commissioner, supra at 498, stated that “an              
          owner was not necessarily a distributee and * * * [that Darby]              
          specifically observed that its statement that a ‘distributee’ had           
          to be a participant or beneficiary was not an exclusive                     
          definition of that word.”  Applying the law as modified by REA,             
          the Court in Powell found that the plan participant’s former                
          spouse was the “distributee” and thereby taxable on her share of            
          the pension benefits.  Id.                                                  
               The QDRO incorporated by its own terms the Stipulation and             
          Order filed August 3, 1999.  The QDRO also included a calculation           
          of the community property interest in petitioner’s CWSC 401(k)              
          plan and the Stipulation and Order provided for the division of             
          such community property interest.  The terms of the Stipulation             
          and Order governed Ms. Seidel’s actions and those of her attorney           
          as to the proceeds received through the distribution from                   
          petitioner’s CWSC 401(k) plan.  The Stipulation and Order                   

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