CourtListener opinion 4330939

Evidence quotes

Clean opinion text

T.C. Memo. 1997-20

 UNITED STATES TAX COURT

 JERRY L. BURTON, Petitioner v.
 COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 6115-95. Filed January 13, 1997.

 P received a lump-sum distribution from two
accounts under a qualified pension plan in 1991.
Pursuant to a divorce decree entered shortly
thereafter, part of the distribution was used to pay
off the mortgage on P's former residence and to pay his
ex-wife $30,000. P reported the distribution as income
on his 1991 Federal income tax return, but included the
amount used to satisfy his mortgage obligation and the
amount paid to his ex-wife as part of an alimony
deduction. R disallowed the alimony deduction and
determined that P is taxable on the entire
distribution. P contends that he is not liable for tax
on the portion of the distribution paid to his former
wife and the portion used to satisfy the mortgage
because the payments were made pursuant to a qualified
domestic relations order (QDRO), as defined by sec.
414(p), I.R.C. Held: The divorce decree rendered
after the lump-sum distribution to P does not meet the
requirements of sec. 414(p), I.R.C., and is thus not a
 - 2 -

 QDRO. Therefore, P is liable for tax on the entire
 lump-sum distribution. Held, further, P is liable for
 additional tax on the entire lump-sum as a result of
 the early distribution from a qualified retirement plan
 pursuant to sec. 72(t), I.R.C.

 John L. Onesto, for petitioner.

 Donald K. Rogers and Matthew J. Fritz, for respondent.

 MEMORANDUM OPINION

 NIMS, Judge:* Respondent determined a deficiency in the

1991 Federal income tax of petitioner Jerry L. Burton in the

amount of $53,916, stemming from funds received by petitioner in

connection with the closing of his retirement benefits accounts.

A petition was filed on April 24, 1995. An Answer was filed on

June 13, 1995. Respondent thereafter filed an Amendment to

Answer, claiming an increased deficiency of $17,676 based upon

section 72(t).

 Unless otherwise indicated, all section references are to

sections of the Internal Revenue Code in effect for the year in

issue, and all Rule references are to the Tax Court Rules of

Practice and Procedure.

 The sole issue for decision is whether the portion of

petitioner's retirement account distribution used to pay off the

mortgage on petitioner's former residence and to pay his ex-wife

 *This case was reassigned to Judge Arthur L. Nims, III, by
Order of the Chief Judge.
 - 3 -

$30,000 pursuant to their divorce decree constituted taxable

income to petitioner in the amount of $156,099.46 for 1991.

 This case was submitted to the Court on a full stipulation

of facts, which are so found. The stipulation of facts and the

attached exhibits are incorporated herein by this reference. At

the time the petition was filed, petitioner resided in Jackson,

Ohio.

 Background

 Petitioner's employment with Fluor Daniel, Inc. (Fluor

Daniel) was terminated on March 8, 1991. Petitioner subsequently

divorced Linda Gayle Burton (Mrs. Burton) on June 11, 1991; an

\Agreed Decree of Divorce\" (Decree) was entered with the District