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attaching pension benefits were preempted by ERISA’s spendthrift
provision. S. Rept. 98-575, at 20 (1984), 1984-2 C.B. 447, 456
(recognizing conflicting decisions). Congress’s primary intent
in recognizing the QDRO exception was to clarify that these
domestic support obligations did not fall within the scope of
ERISA preemption. See Mackey v. Lanier Collection Agency &
Serv., Inc., 486 U.S. 825, 838-839 (1988).
The parties are in agreement that Mr. Seidel’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.
Petitioner 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
1984, 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.
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