FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

D.N., 

No. 10-35037 Plaintiff-Appellant,

D.C. No.

v.  6:09-cv-06180-AA

UNITED STATES OF AMERICA,

OPINION Defendant-Appellee. 

Appeal from the United States District Court

for the District of Oregon

Ann Aiken, District Judge, Presiding

Argued and Submitted

October 8, 2010—Portland, Oregon

Filed November 22, 2010

Before: A. Wallace Tashima, Richard A. Paez and

Richard R. Clifton, Circuit Judges.

Opinion by Judge Clifton

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COUNSEL

Christopher D. Hatfield, Hurley, Re, P.C., Bend, Oregon, for

the plaintiff-appellant.

John A. DiCicco, Acting Assistant Attorney General; Kenneth

L. Greene and Jennifer M. Rubin (argued), Tax Division, U.S.

Department of Justice, Washington, D.C., for the defendantappellee. 

OPINION

CLIFTON, Circuit Judge:

After his father died, D.N., a minor, was paid funds held in

his father’s 401(k) retirement account. Through his legal representative, D.N. acknowledges that the “distributee” of such

money is liable for income tax on it but contends that he

should not be treated as the distributee of the money due to

the particular circumstances. Instead, he argues that his

mother, named as the primary beneficiary under the 401(k)

plan in the event of the father’s death, was the distributee. His

mother did not actually receive any of the funds, and she was

statutorily ineligible under Oregon law to receive them

because she was the “slayer” of D.N.’s father, her husband.

See Or. Rev. Stat. § 112.515 (2001).1 Because she was ineligi1The 2001 version of the statute was current when the criminal trial took

place and was used by the district court. The statute has since been

amended in ways that are not material to the case. 

D.N. v. UNITED STATES 18671
ble to receive the 401(k) funds, they were paid to D.N. as the

named secondary beneficiary.

After D.N. received the funds from his father’s 401(k) plan,

he paid income tax on the distribution and sought a refund.

The IRS denied D.N.’s claim, and D.N. brought a refund

action in district court. Both sides filed motions for summary

judgment. The district court granted the government’s motion

and denied D.N.’s. We agree that D.N. was the distributee of

the funds, properly liable for the tax, and affirm the judgment

of the district court.

[1] Under 26 U.S.C. § 402(a), “any amount actually distributed to any distributee by any employees’ trust described

in section 401(a) which is exempt from tax . . . shall be taxable to the distributee.” D.N. acknowledges that he received

the money from such an employee trust but contends that his

mother was the “distributee.” 

D.N. cites Darby v. Comm’r, 97 T.C. 51 (1991), in support

of his claim.2 In that case an ex-husband argued that he should

not be taxed on plan benefits distributed to his ex-wife pursuant to a divorce decree that assigned his interest in those benefits to her. The tax court held that “[a] distributee of a

distribution under a plan ordinarily is the participant or beneficiary who, under the plan, is entitled to receive the distribution.” Id. at 58. The ex-husband was liable as the distributee

of the funds, the tax court concluded, because he was entitled

to receive the funds from the plan and transferred the benefits

to his ex-wife under the divorce decree.

2The tax court’s decision in Darby is not binding on this court. While

“a presumption exists that the tax court correctly applied the law, no special deference is given to the tax court’s decisions.” Hill v. Comm’r, 204

F.3d 1214, 1217 (9th Cir. 2000). We do not need to decide whether Darby

was properly decided on its facts to resolve the case before us, and we

imply no view on this question. 

18672 D.N. v. UNITED STATES
D.N., relying on Darby, argues that his mother should be

treated as the distributee of the funds from his father’s 401(k)

plan because she was originally entitled to the proceeds and

because she received a benefit from the plan by using her

claim to the funds as a bargaining chip in criminal plea negotiations. She ultimately pled guilty to first-degree manslaughter with intent, a lesser offense than the murder charge

originally pursued by the prosecutor. The prosecutor attested

that her claim to the 401(k) funds played a role in the negotiations.

[2] D.N.’s mother was not the distributee of the funds in

this case, however. She never received any of the money, nor

under Oregon law was she entitled to receive the funds. Even

before she was convicted, once the plan received notice that

she was a suspect in the killing of D.N.’s father, the funds

could not be paid to her. Well before her actual conviction,

the plan administrator indicated that it would not distribute

the funds until the criminal charges had been resolved. See

Or. Rev. Stat. § 112.535. That D.N.’s mother used her status

as the primary beneficiary of the plan for leverage in negotiating a plea does not change the fact that she never received the

money and was not entitled to it. In neither fact nor theory

was she the “distributee” of the funds.

[3] Moreover, the money was not routed to D.N. by his

mother in the way that benefits passed through Darby to his

ex-wife. The money was paid directly to D.N. by the 401(k)

plan because he had been named by his father as the secondary beneficiary. D.N. did not acquire his right to the funds

from his mother.

[4] The money was distributed to D.N., not to his mother.

He was liable as the distributee for the tax.

AFFIRMED.

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