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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
402.
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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