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section 402(e)(1)(A), an alternate payee is treated as the
distributee of a distribution from a qualifying plan only if the
distribution is made to the alternate payee under a QDRO.
Ms. Amarasinghe and respondent contend that the Order fails
to satisfy the requirement of section 414(p)(1)(A)(i) because it
does not recognize Ms. Amarasinghe as an alternate payee. The
statute defines an “alternate payee” as “any spouse, former
spouse, child or other dependent of a participant who is
recognized by a domestic relations order as having a right to
receive all, or a portion of, the benefits payable under a plan
with respect to such participant.” Sec. 414(p)(8).
Specifically, Ms. Amarasinghe and respondent argue that Ms.
Amarasinghe is not recognized as an alternate payee because the
DRO does not give her an independent right to obtain the funds
directly from the Plan, but instead it directs Dr. Amarasinghe to
“cash out” and then pay the funds to Ms. Amarasinghe.
The present case is similar to, but distinguishable from,
Hawkins v. Commissioner, 102 T.C. 61, 62-63 (1994), revd. 86 F.3d
982 (10th Cir. 1996), where the disputed DRO provided: “Wife
shall receive as her separate property: a) Cash of One Million
Dollars ($1,000,000) from Husband’s share of the Arthur C.
Hawkins, DDS Pension Plan.” In interpreting the statute, the Tax
Court stated that because section 414(p) “allows parties to a
marital settlement agreement to allocate the tax burdens between
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Last modified: March 27, 2008