T.C. Memo. 2008-17

UNITED STATES TAX COURT

DWIGHT S. & ANTONINA K. PLATT, Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

HERBERT & CHRISTINE BANGS, Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket Nos. 4467-06, 7221-06. Filed January 31, 2008.

W. Randolph Shump, for petitioners in docket No. 4467-06.

Stuart Henry Levine, for petitioners in docket No. 7221-06.

Bradley C. Plovan, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

CHIECHI, Judge: Respondent determined the following deficiencies in, and accuracy-related penalties under section
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1Unless otherwise indicated, all section references are to

the Internal Revenue Code (Code) in effect for the year at issue. 

All Rule references are to the Tax Court Rules of Practice and

Procedure.

2Respondent made certain additional determinations in the

respective notices of deficiency that respondent issued to

petitioners in these cases, the resolution of which flows automatically from our resolution of the determinations in those

respective notices that we address herein. See also infra note

33. 

6662(a)1 on, petitioners’ respective Federal income tax for 2002:

Petitioners Deficiency Accuracy-Related Penalty

Dwight S. Platt and 

 Antonina K. Platt

$3,531 $706

Herbert Bangs and 

 Christine Bangs

 2,175 435

We must decide whether certain payments that petitioner

Herbert Bangs (Mr. Bangs) made during 2002 to petitioner Antonina

Platt (Ms. Platt) are deductible or excludable from Mr. Bangs’

income for his taxable year 2002 and includible in Ms. Platt’s

income for her taxable year 2002.2 We hold that they are not.

FINDINGS OF FACT

All of the facts in these cases, which the parties submitted

under Rule 122, have been stipulated by the parties and are so

found except as stated below.

Petitioners in the case at docket No. 4467-06, Ms. Platt and

Dwight Platt (Mr. Platt), resided in Stevenson, Maryland, at the

time they filed the petition in that case. Petitioners in the

case at docket No. 7221-06, Mr. Bangs and Christine Bangs (Ms.
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3We shall refer to the second-ordered paragraph quoted above

as the divorce decree $32,900 lump-sum payment provision.

Bangs), resided in Ruxton, Maryland, at the time they filed the

petition in that case. 

On a date not disclosed by the record, Mr. Bangs and Ms.

Platt were married. At all relevant times, including while Mr.

Bangs was married to Ms. Platt, Mr. Bangs participated in a

pension plan (Baltimore County pension plan) maintained by his

employer, Baltimore County, Maryland. At those times, that was

the only pension plan in which Mr. Bangs participated. 

On March 2, 1983, Mr. Bangs and Ms. Platt divorced pursuant

to a decree of divorce (divorce decree) issued by the Circuit

Court for Baltimore County. The divorce decree provided in

pertinent part:

IT IS FURTHER ORDERED, that the Defendant shall

pay to the Plaintiff, directly, as permanent alimony,

the sum of Three Hundred Dollars ($300) per month

effective October 1, 1982, payable until the death of

either party or the remarriage of the Plaintiff, whichever shall first occur, subject to the further order of

the Court.

IT IS FURTHER ORDERED, that the Defendant shall

pay to the Plaintiff, as a monetary award, the sum of

Thirty-Two Thousand Nine Hundred Dollars ($32,900),

which sum shall be payable within 90 days of February

1, 1983.[3]

IT IS FURTHER ORDERED, that the aforesaid monetary

award shall be reduced to judgment on May 1, 1983 and

shall draw interest at the legal rate from such date.

* * * * * * *
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4We shall refer to the fourth-ordered paragraph quoted above

as the divorce decree provision in question.

5The parties stipulated that during 2002 Mr. Bangs paid to

Ms. Platt $8,883 pursuant to the divorce decree provision in

question. That stipulation is clearly contrary to the facts that

we have found are established by the record, and we shall disregard it. See Cal-Maine Foods, Inc. v. Commissioner, 93 T.C. 181,

195 (1989). The record establishes, and we have found, that

during 2002 Mr. Bangs paid to Ms. Platt $8,803.87 pursuant to the

divorce decree provision in question. 

IT IS FURTHER ORDERED, that with respect to the

Defendant’s pension, the Defendant shall pay to the

Plaintiff, if, as, and when he receives each pension

payment, that sum which is determined in accordance

with the following formula:

50 percent X (12 years and seven months of 

 marriage ÷ by total years of employment).[4]

IT IS FURTHER ORDERED, that if the Defendant

voluntarily takes his pension as a lump sum, either

before or after retirement, then Defendant shall, upon

receipt of * * * said lump sum, pay to the Plaintiff

the sum of Twenty-two Thousand Five Hundred Dollars

($22,500), with simple interest at the rate of ten 

(10) percent from July 1, 1983, to the date of payment. 

[Reproduced literally.]

During 2002, Mr. Bangs received monthly payments from the

Baltimore County pension plan. Pursuant to the divorce decree

provision in question, shortly after receiving each such monthly

payment, Mr. Bangs made the following monthly payments totaling

$8,803.875 (monthly payments at issue) on the dates indicated by

electronic transfers from a joint checking account that he and

Ms. Bangs maintained to a checking account of Ms. Platt: 
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6For convenience, we shall generally refer hereinafter only

to Mr. Bangs, and not to Ms. Bangs.

7See supra note 5. The record does not disclose why Mr.

Bangs deducted as alimony $79.13 in excess of the $8,803.87 that

he paid to Ms. Platt during that year pursuant to that divorce

decree provision. 

Date of Payment Amount of Payment

01/14/2002 $728.91

02/13/2002 728.91

03/13/2002 728.91

04/15/2002 728.91

05/13/2002 728.91

06/13/2002 728.91

07/15/2002 728.91

08/15/2002 740.30

09/16/2002 740.30

10/15/2002 740.30

11/15/2002 740.30

12/16/2002 740.30

Mr. Bangs and Ms. Bangs timely filed Form 1040, U.S. Individual Income Tax Return (Form 1040), for their taxable year 2002

(Mr. Bangs’ return).6 In that return, Mr. Bangs claimed a deduction of $8,8837 for alimony. Mr. Bangs did not issue to Ms.

Platt and did not file with the Internal Revenue Service any Form

1099 for a nominee distribution with respect to those payments.

On January 18, 2006, respondent issued to Mr. Bangs a notice

of deficiency with respect to his taxable year 2002 (notice for

Mr. Bangs’ taxable year 2002). In that notice, respondent

disallowed the alimony deduction that Mr. Bangs claimed in Mr.

Bangs’ return. In the notice for Mr. Bangs’ taxable year 2002,
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8For convenience, we shall generally refer hereinafter only

to Ms. Platt, and not to Mr. Platt. 

9See supra note 5.

10See supra note 5. 

respondent also determined that Mr. Bangs is liable for his

taxable year 2002 for the accuracy-related penalty under section

6662(a).

Mr. Platt and Ms. Platt timely filed Form 1040 for their

taxable year 2002.8 In that return, Ms. Platt did not include in

income the $8,803.879 that she received from Mr. Bangs during

2002. 

On January 18, 2006, respondent issued to Ms. Platt a notice

of deficiency with respect to her taxable year 2002 (notice for

Ms. Platt’s taxable year 2002). In that notice, respondent

determined that Ms. Platt received $8,88310 of alimony that is

includible in her income for that year. In the notice for Ms.

Platt’s taxable year 2002, respondent also determined that Ms.

Platt is liable for her taxable year 2002 for the accuracyrelated penalty under section 6662(a).

OPINION

The parties submitted these cases fully stipulated under

Rule 122. That the parties submitted these cases under that Rule

does not affect who has the burden of proof or the effect of a
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11The parties do not address sec. 7491(a). In any event, we

need not decide whether the burden of proof shifts to respondent

under that section. That is because resolution of the issue

presented here does not depend on who has the burden of proof. 

12Respondent in each of these cases is in essence a stakeholder. On brief, however, respondent agrees with Ms. Platt’s

position. 

13DEFRA also amended sec. 215 (amended sec. 215). DEFRA,

Pub. L. 98-369, sec. 422(b), 98 Stat. 797. That amendment

applies with respect to (1) divorce and separation instruments

(continued...)

failure of proof.11 Rule 122(b); Borchers v. Commissioner, 95

T.C. 82, 91 (1990), affd. 943 F.2d 22 (8th Cir. 1991). 

In support of his argument that the monthly payments at

issue are deductible or excludable from his income and includible

in Ms. Platt’s income for the taxable year 2002, Mr. Bangs

advances several arguments. We first address Mr. Bangs’ argument

that the monthly payments at issue constitute alimony under

section 71 and are deductible under section 215(a). Ms. Platt

and respondent take the position that those payments are not

alimony under that section.12

In advancing their respective positions on brief as to

whether the monthly payments at issue constitute alimony under

section 71, Mr. Bangs and Ms. Platt rely on section 71 as amended

by the Deficit Reduction Act of 1984 (DEFRA), Pub. L. 98-369,

sec. 422(a), 98 Stat. 795 (amended section 71). Respondent

argues that amended section 71 does not apply to those payments. 

We agree with respondent.13
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13(...continued)

executed after Dec. 31, 1984, and (2) any such instruments

executed before Jan. 1, 1985, but modified on or after that date

if the modification expressly provides that amended sec. 215

applies to that modification. DEFRA sec. 422(e), 98 Stat. 798. 

The parties do not address whether sec. 215 before its amendment

by DEFRA or amended sec. 215 applies in these cases. On the

record before us, we hold that sec. 215 before its amendment by

DEFRA, and not amended sec. 215, applies. 

14In his reply brief, Mr. Bangs also argues that amended

section 71 applies because “the Commissioner made the assessments

against both sets of taxpayers in order to avoid being ‘whipsawed’”. We reject that argument. That respondent made the

respective determinations at issue in order to avoid being

whipsawed is irrelevant to resolving whether sec. 71 before its

amendment by DEFRA or amended section 71 applies in these cases. 

In her reply brief, Ms. Platt does not address respondent’s

argument that sec. 71 before its amendment by DEFRA, and not

amended section 71, applies in these cases. 

Amended section 71 applies with respect to (1) divorce and

separation instruments executed after December 31, 1984, and 

(2) any such instruments executed before January 1, 1985, but

modified on or after that date if the modification expressly

provides that amended section 71 applies to such modification. 

DEFRA sec. 422(e), 98 Stat. 798.

In his reply brief, Mr. Bangs argues that section 71 before

its amendment by DEFRA does not apply in the instant cases

because he and Ms. Platt “effectively stipulated” that amended

section 71 applies.14 We reject that argument. We note initially that although Mr. Bangs and Ms. Platt take the position on

brief that amended section 71 applies in these cases, they did

not stipulate that that section applies. Even if Mr. Bangs and
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15See supra note 13.

Ms. Platt had stipulated that amended section 71 applies in these

cases, the Court is not bound by stipulations of law. See, e.g.,

Thoburn v. Commissioner, 95 T.C. 132, 144 n.12 (1990). 

The Circuit Court for Baltimore County issued the divorce

decree on March 2, 1983. The record does not establish that that

court modified that decree after that date. On the record before

us, we hold that section 71 before its amendment by DEFRA, and

not amended section 71, applies in determining whether the

monthly payments at issue constitute alimony.

In his reply brief, Mr. Bangs states: “We would agree that

if the pre-Tax Reform Act of 1984 version of I.R.C. 71 [section

71 before its amendment by DEFRA] is applicable, the Disputed

Payments [monthly payments at issue] do not constitute alimony.”

Mr. Bangs thus concedes that if we were to hold that section 71

before its amendment by DEFRA applies, which we have, the monthly

payments at issue do not constitute alimony under that section. 

Based on Mr. Bangs’ concession, we hold that the monthly payments

at issue do not constitute alimony under section 71 before its

amendment by DEFRA and are not deductible under section 215(a)

before its amendment by DEFRA.15

We turn now to Mr. Bangs’ argument that Ms. Platt was the

owner of an interest in the Baltimore County pension plan since

the divorce decree ordered him to pay her “if, as, and when he
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16See supra note 12. 

17Sec. 401(a) provides in pertinent part:

SEC. 401. QUALIFIED PENSION, PROFIT-SHARING, AND STOCK

 BONUS PLANS.

(a) Requirements for Qualification.--A trust

created or organized in the United States and forming

part of a stock bonus, pension, or profit-sharing plan

of an employer for the exclusive benefit of his employees or their beneficiaries shall constitute a qualified

trust under this section--

(1) if contributions are made to the trust by

such employer, or employees, or both * * * for the

purpose of distributing to such employees or their

(continued...)

receives each pension payment, that sum which is determined in

accordance with the following formula: 50 percent X (12 years

and seven months of marriage ÷ by total years of employment).” 

As a result, according to Mr. Bangs, the monthly payments at

issue are excludable from his income and includible in Ms.

Platt’s income for the taxable year 2002. Ms. Platt and respondent argue that Ms. Platt did not own an interest in the Baltimore County pension plan.16 As a result, according to Ms. Platt

and respondent, the monthly payments at issue are includible in

Mr. Bangs’ income and excludable from her income for the taxable

year 2002. 

Petitioners in each of these cases agree, and respondent

does not dispute, that the Baltimore County pension plan constitutes a qualified pension plan within the meaning of section

401(a).17 Moreover, none of the parties disputes that the Balti-
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17(...continued)

beneficiaries the corpus and income of the fund

accumulated by the trust in accordance with such

plan; 

(2) if under the trust instrument it is impossible, at any time prior to the satisfaction of

all liabilities with respect to employees and

their beneficiaries under the trust, for any part

of the corpus or income to be (within the taxable

year or thereafter) used for, or diverted to,

purposes other than for the exclusive benefit of

his employees or their beneficiaries * * * 

All references hereinafter to a qualified pension plan are to a

qualified pension plan within the meaning of sec. 401(a).

18Sec. 414(d) defines the term “governmental plan” as “a

plan established and maintained for its employees by the Government of the United States, by the government of any State or

political subdivision thereof, or by any agency or instrumentality of any of the foregoing.” All references hereinafter to a

governmental plan are to a governmental plan within the meaning

of sec. 414(d).

19Instead, in support of their respective positions as to

whether the monthly payments at issue are excludable from Mr.

Bangs’ income and includible in Ms. Platt’s income for the

taxable year 2002, the parties rely on sec. 61(a)(11) and on

cases (e.g., Pfister v. Commissioner, T.C. Memo. 2002-198, affd.

359 F.3d 352 (4th Cir. 2004), and Witcher v. Commissioner, T.C.

Memo. 2002-292) in which the Court based its respective holdings

on that section. Although sec. 61(a)(11) provides the general

rule that gross income includes income derived from pensions,

Congress provided a special rule in sec. 402(a) with respect to

(continued...)

more County pension plan constitutes a governmental plan as

defined in section 414(d).18 Inexplicably, however, none of the

parties addresses section 402(a) in advancing their respective

positions as to whether the monthly payments at issue are

excludable from Mr. Bangs’ income and includible in Ms. Platt’s

income for the taxable year 2002.19 That section governs the
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19(...continued)

distributions from qualified pension plans. See Darby v. Commissioner, 97 T.C. 51, 58 (1991). Unlike the instant cases, Pfister

and Witcher did not involve qualified pension plans. Those cases

involved Federal military retirement programs that are subject to

Federal statutes that do not apply in the instant cases. The

parties’ reliance on sec. 61(a)(11) and on Pfister and Witcher is

misplaced.

20All references hereinafter to the spendthrift provisions

are to the provisions of sec. 401(a)(13) that, with certain

exceptions, prohibit the assignment and alienation of benefits

under a qualified pension plan. 

21The rationale on which the Court based its holding in

Darby v. Commissioner, supra, related in large part to Congress’

addition to the Code in 1984 of the provisions relating to

qualified domestic relations orders (QDRO provisions). Those

provisions include sec. 414(p), which defines the term “qualified

domestic relations order” (QDRO), and sec. 402(e)(1)(A) (origi-

(continued...)

taxation of distributions from a qualified pension plan. Section

402(a) provides that any amount distributed from a qualified

pension plan, including a governmental plan, is generally taxable

to the distributee under such a plan. 

In Darby v. Commissioner, 97 T.C. 51 (1991), the Court

addressed the meaning of the term “distributee” in section 402(a)

in the context of a qualified pension plan, which was not a

governmental plan (or any other qualified plan) that was not

subject to the so-called spendthrift provisions of section

401(a)(13).20 The Court held there that the term “distributee”

in section 402(a) ordinarily means the participant or the beneficiary who is entitled under such a plan to receive a distribution. Darby v. Commissioner, supra at 58. In so holding,21 the
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21(...continued)

nally enacted as sec. 402(a)(9)), which governs the taxation of

distributions or payments that are made pursuant to a QDRO. As

discussed below, when Congress enacted the QDRO provisions in

1984, those provisions did not apply to governmental plans that

are not subject to the spendthrift provisions of sec. 401(a)(13). 

See secs. 414(p)(9), 401(a); sec. 1.401(a)-13(a), Income Tax

Regs.; see also H. Rept. 101-247, at 1443 (1989). 

The legislative history of the QDRO provisions enacted in

1984 states in pertinent part:

Generally, under present law, benefits under a

pension, profit-sharing, or stock bonus plan (pension

plan) are subject to prohibitions against assignment or

alienation (spendthrift provisions. [sic]) * * *

Several cases have arisen in which courts have

been required to determine whether the * * * spendthrift provisions apply to family support obligations

(e.g., alimony, separate maintenance, and child support

obligations). * * * There is a divergence of opinion

among [those courts] * * *.

* * * * * * * 

Reasons for Change

The committee believes that the spendthrift rules

should be clarified by creating a limited exception

that permits benefits under a pension, etc., plan to be

divided under certain circumstances. In order to

provide rational rules for plan administers [sic], the

committee believes it is necessary to establish guidelines for determining whether the exception to the

spendthrift rules applies. * * * 

S. Rept. 98-575, at 18-19 (1984), 1984-2 C.B. 447, 456. 

Court rejected the taxpayer’s argument that the term

“distributee” in section 402(a) means the owner of an interest in

a qualified pension plan. Id. at 66.
- 14 -

22In Powell v. Commissioner, 101 T.C. 489 (1993), the Court

set forth an exception to the general definition in Darby v.

Commissioner, supra, of the term “distributee” in sec. 402(a). 

The Court held in Powell that that definition did not apply in a

situation governed by community property laws where the former

spouse’s “rights were acquired by her directly at the outset and

did not represent a transfer to her of rights which had previously accrued to [her husband]”. Id. at 497-498. Accordingly,

the Court further held in Powell that the former spouse was a

“distributee” under sec. 402(a) who was “taxable on her share of

the pension benefits” in question. Id. at 499. 

A question arises as to whether the definition of the term

“distributee” in Darby v. Commissioner, supra, applies in the

instant cases, where the qualified pension plan in question is a

governmental plan that is not subject to the spendthrift provisions of section 401(a)(13).22 We need not resolve that question. That is because, regardless of whether in the context of a

governmental plan, such as the qualified pension plan involved in

the instant cases, the term “distributee” in section 402(a) means

the participant or the beneficiary under such a plan, as the

Court held in Darby, or the owner of such a plan, as the parties

apparently argue here, on the record before us, we find that for

purposes of section 402(a) Mr. Bangs, and not Ms. Platt, was the

distributee under the Baltimore County pension plan. 

The parties do not dispute (1) that during the year at issue

Mr. Bangs, and not Ms. Platt, was a participant under the Baltimore County pension plan and (2) that during that year Ms. Platt

was not a beneficiary of an interest in that pension plan. We

thus consider only the parties’ disagreement over whether Ms.
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23As discussed supra note 19, Mr. Bangs’ reliance on Pfister

v. Commissioner, T.C. Memo. 2002-198, is misplaced because that

case involved a Federal military retirement program that was

subject to Federal statutes that do not apply in the instant

cases. Mr. Bangs’ reliance on Pfister also is misplaced because,

unlike the divorce decree involved in the instant cases, the

divorce decree involved in Pfister provided that the taxpayer in

that case was to “be owner of, and receive, one-half of husband’s

disposable retired or retainer pay”. Id.

Platt was the owner of an interest in the Baltimore County 

pension plan. 

In support of their respective positions as to whether Ms.

Platt was the owner of an interest in the Baltimore County

pension plan, the parties rely on the divorce decree provision in

question. That provision requires Mr. Bangs to pay an amount

determined pursuant to a formula stated therein “if, as, and

when” he receives a payment from the Baltimore County pension

plan. Contrary to Mr. Bangs’ argument, the divorce decree

provision in question does not provide that Ms. Platt is the

owner of an interest in that plan.23 Nor has that provision been

construed to do so. In fact, the Court of Special Appeals of

Maryland concluded that the divorce decree provision in question

granted nothing more than a monetary award to Ms. Platt. See

Bangs v. Bangs, 475 A.2d 1214, 1223 (Md. Ct. Spec. App. 1984). 

In Bangs v. Bangs, supra, Mr. Bangs appealed from the

divorce decree involved in these cases. In that appeal, Mr.

Bangs did not argue, as he does here, that the divorce decree

provision in question provided that Ms. Platt was the owner of an
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24The divorce decree $32,900 lump-sum payment provision

provided: 

IT IS FURTHER ORDERED, that the Defendant shall

pay to the Plaintiff, as a monetary award, the sum of

Thirty-Two Thousand Nine Hundred Dollars ($32,900),

which sum shall be payable within 90 days of February

1, 1983.

25The divorce decree provision in question provided:

IT IS FURTHER ORDERED, that with respect to the

Defendant’s pension, the Defendant shall pay to the

Plaintiff, if, as, and when he receives each pension

payment, that sum which is determined in accordance

with the following formula: 

50 percent X (12 years and seven months of 

 marriage ÷ by total years of employment).

interest in the Baltimore County pension plan. Instead, he

argued (1) that the Circuit Court for Baltimore County granted

Ms. Platt two monetary awards consisting of the payment ordered

under the divorce decree $32,900 lump-sum payment provision24 and

the payments ordered under the divorce decree provision in

question25 and (2) that the Circuit Court for Baltimore County

erred by refusing to place a “cap” or “ceiling” on the latter

payments. Id. at 1222-1223. 

The Court of Special Appeals of Maryland agreed with Mr.

Bangs that the payments ordered under the divorce decree $32,900

lump-sum payment provision and under the divorce decree provision

in question were in the nature of a monetary award, id. at 1223,

but disagreed with Mr. Bangs that the Circuit Court for Baltimore

County had granted Ms. Platt two separate monetary awards under
- 17 -

26As discussed supra note 19, Mr. Bangs’ reliance on Witcher

v. Commissioner, T.C. Memo. 2002-292, is misplaced because that

case involved a Federal military retirement program that was

subject to Federal statutes that do not apply in the instant

cases. Mr. Bangs’ reliance on Witcher also is misplaced because,

unlike the State law involved in the instant cases, the State law

(continued...)

those two provisions, id. The Court of Special Appeals of

Maryland held that the Circuit Court for Baltimore County granted

Ms. Platt only one monetary award consisting of the payment

ordered under the divorce decree $32,900 lump-sum payment provision and the payments ordered under the divorce decree provision

in question. Id. at 1222-1223. The Court of Special Appeals of

Maryland also disagreed with Mr. Bangs’ argument that the Circuit

Court for Baltimore County erred by refusing to place a “cap” or

“ceiling” on the latter payments. Id. at 1223. According to the

Court of Special Appeals of Maryland, the Circuit Court for

Baltimore County had broad discretion and did not abuse that

discretion by determining a fixed percentage for Ms. Platt of the

future payments that Mr. Bangs was to receive from the Baltimore

County pension plan. Id. at 1222-1223. 

The law of Maryland in effect at the time that the Circuit

Court for Baltimore County issued the divorce decree involved in

the instant cases provides further support for our finding that

the divorce decree provision in question does not provide that

Ms. Platt is the owner of an interest in the Baltimore County

pension plan.26 The law of Maryland in effect at that time, Md.
- 18 -

26(...continued)

involved in Witcher authorized the court that issued the divorce

decree involved in that case to award an ownership interest in a

military pension as part of a divorce settlement. Id. 

27The law of Maryland in effect at the time that the Circuit

Court for Baltimore County issued the divorce decree involved in

the instant cases, Md. Code Ann., Cts. & Jud. Proc. sec. 3-6A-05

(1980 & Supp. 1983)(repealed and recodified as Md. Code Ann.,

Fam. Law sec. 8-205 by Acts 1984, ch. 296, secs. 1 and 2),

provided in pertinent part: 

[Sec.] 3-6A-05. Monetary award.

* * * * * * * 

(b) The court shall determine the value

of all marital property. After making the

determination, the court may grant a monetary

award as an adjustment of the equities and

rights of the parties concerning marital

property, whether or not alimony is awarded.

* * *

In Deering v. Deering, 437 A.2d 883, 890 (Md. 1981), the

Court of Appeals of Maryland held under the above-quoted provision that “a spouse’s pension rights, to the extent accumulated

during the marriage, constitute a form of ‘marital property’”. 

Code Ann., Cts. & Jud. Proc. sec. 3-6A-05 (1980 & Supp.

1983)(repealed and recodified as Md. Code Ann., Fam. Law sec. 8-

205 by Acts 1984, ch. 296, secs. 1 and 2),27 did not authorize

Maryland courts to transfer ownership of an interest in a pension

plan as part of a divorce settlement. See generally Klingenberg

v. Klingenberg, 675 A.2d 551, 555-556 (Md. 1996). It was not

until 1986 that the legislature of the State of Maryland authorized Maryland courts to transfer ownership of an interest in a

“pension, retirement, profit sharing, or deferred compensation
- 19 -

28Md. Code Ann., Fam. Law, sec. 8-205(a)(West 2007) provides

in pertinent part:

(a)(1) * * * after the court determines which

property is marital property, and the value of the

marital property, the court may transfer ownership of

an interest in property described in paragraph (2) of

this subsection, grant a monetary award, or both, as an

adjustment of the equities and rights of the parties

concerning marital property, whether or not alimony is

awarded.

 (2) The court may transfer ownership of an interest in:

(i) a pension, retirement, profit sharing, or

deferred compensation plan, from one party to

either or both parties; 

(ii) subject to the consent of any

lienholders, family use personal property, from

one or both parties to either or both parties; and

(iii) subject to the terms of any lien, real

property jointly owned by the parties and used as

the principal residence of the parties when they

lived together * * * 

plan” as part of a divorce settlement. Md. Code Ann., Fam. Law

sec. 8-205(a)(2)(i)(West 2007).28 See generally Klingenberg v.

Klingenberg, supra at 555-556. 

On the record before us, we find that Ms. Platt was not the

owner of an interest in the Baltimore County pension plan. On

that record, we further find that, regardless of whether in the

context of a governmental plan, such as the qualified pension

plan involved in the instant cases, the term “distributee” in

section 402(a) means the participant or the beneficiary under

such a plan, as the Court held in Darby v. Commissioner, 97 T.C.
- 20 -

29Sec. 414(p)(8) defines the term “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.”

30We note that the parties stipulated (QDRO stipulation):

“No ‘qualified domestic relations order’ (‘QDRO’) has been issued

to either Antonina K. Platt or Herbert Bangs either on March 2,

1983 or at any time thereafter.” None of the parties argues that

the QDRO stipulation means that the divorce decree involved in

the instant cases may not qualify under sec. 414(p) as a QDRO. 

We shall independently address whether that divorce decree so

qualifies. 

at 58, or the owner of an interest in such a plan, as the parties

apparently argue here, for purposes of that section, Mr. Bangs,

and not Ms. Platt, was the distributee under the Baltimore County

pension plan, unless the divorce decree qualifies under section

414(p) as a QDRO.

The final argument that Mr. Bangs advances in support of his

position in these cases and that we consider now is that the

divorce decree involved in these cases qualifies under section

414(p) as a QDRO. If the divorce decree were to qualify as such,

Ms. Platt would be an alternate payee29 under the Baltimore

County pension plan. In that event, she would be treated for

purposes of section 402(a) as the distributee under that plan of

the payments to which she was entitled pursuant to the divorce

decree provision in question. See sec. 402(e)(1)(A).

 We reject Mr. Bangs’ argument that the divorce decree

qualifies under section 414(p) as a QDRO.30 The QDRO provisions
- 21 -

31Congress added sec. 414(p)(11) to the Code in order “to

conform generally [the tax rules relating to transfers of interests in a governmental plan] to the tax rules applicable to other

qualified plans pursuant to the Retirement Equity Act.” H. Rept.

101-247, at 1443 (1989). 

32Generally, a domestic relations order qualifies under sec.

414(p) as a QDRO if that order (1) creates or recognizes the

existence of an alternate payee’s right to, or assigns to an

alternate payee the right to, receive all or a portion of the

benefits payable with respect to a participant under a plan, sec.

414(p)(1)(A)(i); (2) clearly specifies certain facts, such as the

name and last known mailing address of the participant and the

name and mailing address of the alternate payee, sec. 414(p)(2);

and (3) does not alter the amount or form of the plan benefits,

sec. 414(p)(3). With respect to governmental plans, however, a

domestic relations order qualifies under sec. 414(p) as a QDRO if

that order creates or recognizes the existence of an alternate

payee’s right, or assigns to an alternate payee the right, to

receive all or a portion of the benefits payable with respect to

a participant under a plan. See sec. 414(p)(11). 

that Congress enacted in 1984 did not apply to governmental

plans. See sec. 414(p)(9); see also supra note 21. In 1989,

Congress added section 414(p)(11) to the Code.31 Omnibus Budget

Reconciliation Act of 1989 (OBRA), Pub. L. 101-239, sec.

7841(a)(2), 103 Stat. 2427-2428. Section 414(p)(11) provides

that “a distribution or payment from a governmental plan * * *

shall be treated as made pursuant to a qualified domestic relations order if it is made pursuant to a domestic relations order

which meets the requirement of clause (i) of paragraph (1)(A)” of

section 414(p).32 Section 414(p)(11) applies only with respect

to transfers of marital interests in governmental plans that

occur after December 19, 1989. OBRA sec. 7841(a)(3), 103 Stat.

2428. 
- 22 -

33On brief, respondent does not advance any arguments

in support of the respective determinations under sec. 6662(a) in

the notice for Mr. Bangs’ taxable year 2002 and in the notice for

Ms. Platt’s taxable year 2002. We conclude that respondent

has abandoned those determinations. Assuming arguendo that we

had not concluded that respondent abandoned those respective

determinations, on the record before us, we find that neither

petitioners in the case at docket No. 4467-06 nor petitioners in

the case at docket No. 7221-06 are liable for the accuracyrelated penalty under sec. 6662(a).

The Circuit Court for Baltimore County issued the divorce

decree involved in the instant cases on March 2, 1983. On the

record before us, we hold that section 414(p)(11) does not apply

to that divorce decree. On that record, we further hold that the

divorce decree involved in the instant cases does not qualify

under section 414(p) as a QDRO and that Ms. Platt is not an

alternate payee for purposes of section 402(a). Accordingly, we

further hold that Ms. Platt is not to be treated as a distributee

under the Baltimore County pension plan of the payments to which

she was entitled pursuant to the divorce decree provision in

question. See sec. 402(e)(1)(A). 

Based upon our examination of the entire record before us,

we find that the monthly payments at issue are not deductible or

excludable from Mr. Bangs’ income and are not includible in Ms.

Platt’s income for the taxable year 2002.33

We have considered all of the parties’ respective contentions and arguments that are not discussed herein, and we find

them to be without merit, irrelevant, and/or moot.
- 23 -

To reflect the foregoing, 

Decision will be entered for

petitioners in docket No. 4467-06.

Decision will be entered for 

 respondent as to the deficiency and

for petitioners as to the accuracyrelated penalty under section 

6662(a) in docket No. 7221-06.