Stahl v. Commissioner

T.C. Memo. 2001-22

UNITED STATES TAX COURT

ROBERT L. STAHL, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 8423-98. Filed January 31, 2001.

P deducted amounts for alimony paid and an

additional personal exemption. P omitted from income a

distribution from the trustee of an employee plan.

1. Held: P has shown his entitlement to only a

portion of the alimony deduction taken.

2. Held, further, P has not shown his entitlement

to the additional personal exemption.

3. Held, further, P must include in income the

distribution from the trustee.

Robert L. Stahl, pro se.

Michael C. Prindible and Audrey M. Morris, for respondent.

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MEMORANDUM OPINION

HALPERN, Judge: By notice of deficiency dated February 18,

1998 (the notice), respondent determined deficiencies in

petitioner’s 1994 and 1995 Federal income taxes of $2,569 and

$12,390, respectively.

Unless otherwise indicated, all section references are to

the Internal Revenue Code in effect for the years at issue, and

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

Procedure.

The issues for decision concern (1) petitioner’s deductions

for (A) alimony paid and (B) an additional personal exemption and

(2) petitioner’s omission from gross income of an amount received

from Vanguard Fiduciary Trust Co.

Some facts have been stipulated and are so found. The

stipulation of facts, with accompanying exhibits, is incorporated

herein by this reference. We need find few facts in addition to

those stipulated and shall not, therefore, separately set forth

our findings of fact. We shall make additional findings of fact

as we proceed. Petitioner bears the burden of proof. See Rule

142(a).

Background

At the time the petition was filed, petitioner resided in

Australia.

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Petitioner married Gabrielle Hodson on January 16, 1990.

One child, Meagan Elizabeth Stahl (sometimes, Meagan), was born

of that union, on September 20, 1991. Meagan is a child with

special needs, who requires close and personal care from her

mother. On May 12, 1994, Ms. Hodson filed for divorce in the

Circuit Court of the Sixth Judicial Circuit, in and for Pinellas

County, State of Florida (the divorce case and the State Court,

respectively).

On August 18, 1995, the State Court entered its

“Supplemental Final Judgment of Dissolution of Marriage” (the

supplemental final judgment) in the divorce case.1 Among the

findings of fact and orders made by the State Court in the

supplemental final judgment are the following:

2. Shortly after the Former Wife filed her

Petition for Dissolution of Marriage, the Former Wife

moved for and the Court granted an Ex Parte Injunction

in which the Former Wife was awarded temporary

exclusive possession of a BMW automobile and residence

and froze certain assets of the parties. In response

to the Former Wife filing for dissolution of the

marriage and serving the Former Husband, the Former

Husband quit his $60,000.00 per year job in Pinellas

County with E-Systems. He claimed that the injunction

freezing assets caused him to have to move to family in

Indiana and give up his job in Pinellas County.

3. On May 26, 1994, the Former Wife’s counsel

filed an Amended Motion for Temporary Fees, Support and

Exclusive Use and Possession of the Marital Home. The

1

Previously, on May 17, 1995, the State Court had entered

its “Final Judgment of Dissolution of Marriage” (final judgment).

The supplemental final judgment repeated many of the findings

made in the final judgment.

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Former Wife’s counsel did not call this motion up for

hearing until June 23, 1994, at which time the Court

removed the freeze on certain assets and temporarily

made certain assets available to the parties for use to

sustain them on an interim basis [by an order filed on

July 1, 1994 (the July 1, 1994, order)]. The Former

Wife’s counsel did not bring on for hearing the

temporary support motion until August 18, 1994, at

which time the Court ordered unallocated child support

and alimony in the amount of $2500 per month, with the

first payment to be made on August 19, 1994. The Order

Setting Unallocated Child Support and Alimony is dated

September 8, 1994, nunc pro tunc to August 18, 1994

[(the September 8, 1994, order)]. This order provided

for disposition of certain assets to fund the temporary

unallocated child support and alimony based upon

Mr. Stahl’s voluntary relinquishment of his $60,000 per

year job at E-Systems.2

4. On March 29, 1995, the Court heard the Former

Wife’s Motion for Order of Contempt in which the Former

Wife proved that the Former Husband had not paid the

unallocated child support or alimony as previously

ordered. The Court found that the Former Husband,

Robert L. Stahl, willfully violated the Order of this

Court dated September 8, 1994 and refused to pay the

child support or pay to or on behalf of the Former Wife

the Hughes IRA account and other assets so as to pay

the unallocated child support and alimony. The Court

further ordered that Robert L. Stahl be committed to

the Pinellas County Jail for a period of 90 days or

until such time as he purges himself from willful

contempt of court. The Court found that Robert L.

Stahl had the ability to purge the contempt and

otherwise provided for the release from the County Jail

on the payment of the purged amount.

5. Although the Former Husband presently resides

in Dallas, Texas, and the Court cannot extradite the

Former Husband from Texas for incarceration on a civil

contempt order, Robert L. Stahl voluntarily presented

himself to the Pinellas County Jail and requested

2

The Sept. 8, 1994, order required that the proceeds from

the assets disposed of were to be paid to Ms. Hodson’s attorney,

Roxann D. Seeley, who was to pay out to Ms. Hodson the $2,500 a

month ordered as unallocated child support and alimony.

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incarceration on the contempt order on Wednesday,

May 3, 1995, five days before the non-jury trial.

Robert L. Stahl appeared at the non-jury trial of this

cause in custody of the Pinellas County Sheriff on the

previously entered contempt and commitment order

entered by this Court for the failure to pay child

support. It is this Court’s interpretation of the

Former Husband’s actions that he is willing to take any

action including voluntarily going to jail to avoid his

obligations to his family and his disabled child.

* * * * * * *

7. Notwithstanding the Former Husband’s voluntary

abandonment of his $60,000 per year job at E-Systems

and the voluntary dissipation of assets available to

pay child support and alimony pending the Final

Hearing, the Former Husband has made it clear that he

has no intentions of paying any support as Ordered by

this Court or complying with lawful Judgments of this

Court. He has dissipated or hidden every asset which

he could control since the pendency of this action.

8. Until the hearing of June 29, 1995, the Former

Wife had been unable and prohibited by the Former

Husband from discovering the value of the Former

Husband’s pension and profit-sharing benefits at his

former employer.

9. At this time the Former Wife is unable to be

employed outside of the home because of the attention

required by the parties’ disabled child. She, however,

is seeking to become employed in the future and is

currently seeking employment. In the interim, because

the Former Husband has refused to pay child support,

although having the ability to do so, the Former Wife

is presently on public assistance through the receipt

of AFDC. * * * The Former Husband’s child support

obligation, commencing June 1, 1995, shall be * * *

$1234.25 per month

* * * * * * *

10. The Court has previously entered a qualified

Domestic Relations Order (QDRO) as to the Former

Husband’s Capital Accumulation Plan (T-CAP). The

Court’s Order was dated November 10, 1994. That Order

is hereby set aside and shall have no force and effect.

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The Court has also previously Ordered, in its

Final Judgment dated May 17, 1995, that a QDRO be

issued to E-Systems in the amount of $22,500 for

unallocated support. That section of said Final

Judgment is hereby amended in that, pursuant to the

Stipulation of the parties, the Wife shall receive the

amount of $55,400 from the Former Husband’s Capital

Accumulation Plan (T-CAP) or from the Former Husband’s

ESOP, whichever is appropriate, for which a QDRO shall

issue in full settlement of the back child support

($22,500 as previously Ordered by the Court in its

Final Judgment dated May 17, 1995) and the remainder

($32,900) as other equitable distribution.

Therefore, a single QDRO shall be ordered, in the

amount of $55,400, of which $22,500 is for a child

support obligation and $32,900 is for equitable

distribution pursuant to the parties agreement of

June 29, 1995.

The Wife’s claim for unallocated alimony is merged

into this Supplemental Final Judgment thus rendering

any claim for alimony pendente lite moot and

unenforceable.

* * * * * * *

14. The Court had previously awarded the Former

Wife the amount of $500 per month, for six months, as

and for alimony. An Income Deduction Order (IDO) shall

be issued to secure payment of said alimony. Until

such time as said IDO is entered, the Former Husband

shall pay said sums directly to Former Wife, beginning

August 1, 1995, and continuing until paid in full.

* * *

* * * * * * *

NOW, THEREFORE, IT IS ORDERED AND ADJUDGED that:

1. The marriage of the parties is irretrievably

broken and that the bonds of matrimony between the

Former Wife, Gabrielle Hodson, and Respondent, Robert

L. Stahl, are dissolved, effective May 17, 1995.

2. The parties shall share parental

responsibility of the minor child of the parties,

Meagan Elizabeth Stahl. However, there shall be no

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visitation, contact or access between Robert L. Stahl

and the minor child until Robert L. Stahl proves to the

Court, via evidence and expert testimony, that it is in

the best interests of the child that he have contact,

access and visitation with the minor child. Any such

visitation will require a further Order of the Court.

* * * * * * *

5. The Former husband is Ordered to pay the

Former Wife six months of non-modifiable alimony

payments enforceable by contempt, at $500 per month,

via Income Deduction Order (IDO), * * * beginning

August 1, 1995, as and for rehabilitative alimony.

* * * * * * *

7. The Court’s previously ordered Qualified

Domestic Relations Order (QDRO) as to the Former

Husband’s Capital Accumulation Plan (T-CAP), dated

November 10, 1994, is hereby set aside and shall have

no force and effect.

In substitution thereof, pursuant to the

Stipulation of the parties on June 29, 1995, the Former

Wife shall receive a total amount of $55,400 from the

Former Husband’s Capital Accumulation Plan (T-CAP) or

from the Former Husband’s ESOP, whichever is

appropriate for which a QDRO shall issue in full

settlement of the back child support ($22,500 as

previously Ordered by the Court in its Final Judgment

dated May 17, 1995) and the remainder ($32,900) as

other equitable distribution.

Therefore, a single QDRO is hereby Ordered to be

entered against E-Systems and the account of the Former

Husband therein, of which $22,500 is for a child

support obligation and $32,900 is for equitable

distribution. The QDRO shall be entered in the total

amount of $55,400 as defined above.

* * * * * * *

10. The Court retains jurisdiction * * * to enter

the required QDRO * * *

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During 1995, and in accordance with the supplemental final

judgment, petitioner paid Ms. Hodson $3,000 in cash.

By check dated December 21, 1995 (the check), Vanguard

Fiduciary Trust Co. (Vanguard) paid $23,192.18 to the order of

Meagan Elizabeth Stahl. The check states: “E-Systems, Inc.”,

“Disbursement Account”, and “Plan Number 091184". For 1995,

Vanguard issued a Form 1099R, “Distributions From Pensions,

Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance

Contracts, etc.”, to petitioner,3 showing a gross distribution

from account number 091184 of $23,192.18 (the Vanguard

distribution).

On petitioner’s 1994 U.S. Individual Income Tax Return, Form

1040 (1994 Form 1040), he deducted $20,000 for alimony paid. On

his 1995 U.S. Individual Income Tax Return, Form 1040 (1995

Form 1040), he deducted $15,500 for alimony paid. He also showed

Meagan as his daughter and dependent and, on account thereof,

deducted $2,500 as a personal exemption deduction. He failed to

include as an item of gross income the Vanguard distribution.

In the notice, respondent adjusted petitioner’s income for

both years by disallowing the claimed deductions for alimony

paid. For 1995, respondent further adjusted petitioner’s income

3

On the Form 1099R, the recipient’s name is shown as “R.L.

Stahl”. The recipient’s “identification number” is identical to

petitioner’s Social Security number. We, therefore, find that

Vanguard intended to name petitioner as recipient of the

Form 1099R.

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by disallowing the personal exemption deduction and including the

Vanguard distribution. Petitioner challenges each of those

adjustments.

Discussion

I. The Deduction for Alimony

Generally, payments of alimony are deductible to the paying

spouse (here, petitioner) and includable in income by the

recipient spouse (here, Ms. Hodson). See secs. 71, 215. In

pertinent part, section 215 provides:

SEC. 215. ALIMONY, ETC., PAYMENTS.

(a) General Rule. – In the case of an individual,

there shall be allowed as a deduction an amount equal

to the alimony or separate maintenance payments paid

during such individual’s taxable year.

(b) Alimony or separate maintenance payments

defined. – For purposes of this section, the term

“alimony or separate maintenance payment” means any

alimony or separate maintenance payment (as defined in

section 71(b)) which is includable in the gross income

of the recipient under section 71.

Section 71(a) provides: “Gross income includes amounts

received as alimony or separate maintenance payments.” In

pertinent part, section 71(b) and (c) provides:

SEC. 71. ALIMONY AND SEPARATE MAINTENANCE PAYMENTS

(b) Alimony or separate maintenance payments defined.--

For purposes of this section-–

(1) In general.--The term “alimony or separate

maintenance payment” means any payment in cash if

-–

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(A) such payment is received by (or on behalf

of) a spouse under a divorce or separation

instrument,

(B) the divorce or separation instrument does

not designate such payment as a payment which is

not includible in gross income under this section

and not allowable as a deduction under section

215,

(C) in the case of an individual legally

separated from his spouse under a decree of

divorce or of separate maintenance, the payee

spouse and the payer spouse are not members of the

same household at the time such payment is made,

and

(D) there is no liability to make any such

payment for any period after the death of the

payee spouse, and there is no liability to make

any payment (in cash or property) as a substitute

for such payments after the death of the payee

spouse.

(2) Divorce or Separation instrument.-–The

term “divorce or separation instrument” means

–-

(A) a decree of divorce or separate maintenance

or a written instrument incident to such a decree,

(B) a written separation agreement, or

(C) a decree (not described in subparagraph (A))

requiring a spouse to make payments for the

support or maintenance of the other spouse.

(c) Payments To Support Children.--

(1) In general.--Subsection (a) shall not apply

to that part of any payment which the terms of the

divorce or separation instrument fix (in terms of

an amount of money or a part of the payment) as a

sum which is payable for the support of children

of the payer spouse.

* * * * * * *

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(3) Special Rule Where Payment Is Less Than

Amount Specified In Instrument.--For purposes of

this subsection, if any payment is less than the

amount specified in the instrument, then so much

of such payment as does not exceed the sum payable

for support shall be considered a payment for such

support.

II. 1994 Adjustment

A. Introduction

Petitioner argues: “As ordered by the * * * [State Court],

alimony was paid in the amount of $2,500.00 per month for June

through December of 1994 and for January through May of 1995”.4

Respondent makes numerous arguments in response. Respondent’s

principal argument is: “At no time did the petitioner attempt to

reconcile his alimony deduction with any actual payments (in

cash) nor did he attempt to allocate the $2,500 payments between

child support and alimony.”

4

At trial, petitioner testified that he computed his

deduction for alimony paid during 1994 ($20,000) on the basis of

8 monthly payments of $2,500 from May through December. That

computation is consistent with finding number three in the

supplemental final judgment that, on May 26, 1994, Ms. Hodson’s

counsel moved for, among other things, temporary support,

although that motion did not come on for hearing until Aug. 18,

1994, and was not subject to an order until Sept. 8, 1994.

Indeed, respondent argues that petitioner computed his 1994

deduction for alimony paid simply by multiplying the number of

months (8) during 1994 for which he was required to pay $2,500 by

that sum to arrive at the $20,000 deduction claimed. Respondent

does not concede that any such payments were made. We shall

consider petitioner’s argument to be that he made such payments

for May through December 1994.

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B. Discussion

The State Court ordered support for Ms. Hodson and Meagan by

the September 8, 1994, order. In the preamble to that order, the

State Court found that Ms. Hodson and Meagan were in need of

support of $2,500 a month. The court also found that, since

petitioner did not have the ability to provide that amount from

earnings, it was necessary to liquidate assets of the parties (to

the divorce case). The court ordered the liquidation of various

assets and the payment of proceeds to Ms. Hodson’s attorney, to

be held in trust for the benefit of Ms. Hodson and Meagan.

Ms. Hodson’s attorney was ordered to pay out $2,500 a month (the

$2,500 payments).

During his testimony in this case, petitioner conceded that

he had no evidence that the $2,500 payments were made. His

argument, as expressed on brief, is as follows:

These payments were made in cash through the

petitioner’s former wife’s attorneys, officers of the

court, by said attorneys liquidating certain assets of

the petitioner and making periodic payments and by

direct payment from the petitioner and through pay role

deduction. The assets liquidated have been summarized

for the court and monies paid in alimony far exceed the

deduction taken by the petitioner. These assets were

not distributed by any other means and a finding that

they were not paid in alimony would return ownership of

these assets to the petitioner. Additionally, since

collection for alimony was the only authority to

liquidate these assets, the officer of the court

executing these liquidations may have defrauded the

United States government and AAL [no definition of the

term “AAL” appears in the record].

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The Florida court did find the petitioner in

contempt for failure to provide one [sic] the assets

ordered to be liquidated while accepting that the other

assets were surrendered as ordered. The court did

provide an order stating the alimony payments were not

made but later reversed this finding after being

provided with the same information provided to this

court. * * *

Petitioner’s argument that assets were liquidated in

compliance with the September 8, 1994, order is completely at

odds with findings made by the State Court in the supplemental

final judgment. Among those findings are the following:

(1) The Court found that the Former Husband, Robert L.

Stahl, willfully violated the Order of this Court dated

September 8, 1994 and refused to pay the child support

or pay to or on behalf of the Former Wife the Hughes

IRA account and other assets so as to pay the

unallocated child support and alimony. * * *

(2) It is this Court’s interpretation of the Former

Husband’s actions that he is willing to take any action

including voluntarily going to jail to avoid his

obligations to his family and his disabled child.

(3) [T]he Former Husband has made it clear that he has no

intentions of paying any support as Ordered by this

Court or complying with lawful Judgments of this Court.

He has dissipated or hidden every asset which he could

control since the pendency of this action.

There is no evidence that, as claimed by petitioner, the

State Court reversed its finding that alimony payments were not

made. Moreover, there is no evidence to support petitioner’s

calumnious claim that Ms. Hobson’s attorney defalcated.

Petitioner was not a credible witness. Petitioner has failed to

prove that, during 1994 (or 1995), in compliance with the

September 8, 1994, order, any proceeds from a liquidation of his

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assets were paid over to Ms. Hodson’s attorney, or were used by

that attorney to make $2,500 payments to or on behalf of Ms.

Hodson or Meagan. Petitioner has failed to prove that, during

1994, he made any of the monthly payments required by the

September 8, 1994, order.

In addition to claiming that he made the monthly payments

required by the September 8, 1994, order, petitioner claims that

the State Court, in the July 1, 1994, order, ordered him to pay

alimony, which, indeed, he did pay. By the July 1, 1994, order,

the State Court lifted the freeze it had imposed on certain

assets (which it described as “the parties’ assets”). It ordered

certain sums from those assets paid to Ms. Hodson. Among those

assets was an account with the MacDill Federal Credit Union,

which the Court found to have an approximate balance of

$2,166.15. It also ordered:

[T]he Wife is to receive from the Husband’s non-marital

assets and his share of marital assets, the approximate

sum of $5,205.00, which sum shall be comprised of the

following approximate amounts:

(a) $900.00 – Husband’s share of U.S. Savings

Bonds which are marital property;

(b) $1,800 – Husband’s separate U.S. Savings

Bonds;

(c) $600 – Husband’s one-half (1/2) 1993 IRS tax

refund;

(d) $250.00 – Husband’s one-half (1/2) of

returned bail money.

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(e) $1,000.00 – from the MacDill Credit Union;

and,

(f) $655.00 – cash from Husband.

It is unclear what the State Court meant by “the parties’

assets”. To the extent Ms. Hodson received payments from assets

in which she had an ownership interest, those payments, to the

extent liquidating that interest, were not alimony to her. See

Jaffe v. Commissioner, T.C. Memo. 1999-196. Petitioner has

failed to convince us that he complied with the July 1, 1994,

order other than that Ms. Hodson received $2,125.73 from the

MacDill Federal Credit Union. Petitioner has failed to convince

us that his interest in that account was more than $1,000. To

that extent, however, we find that he paid alimony to Ms. Hodson

during 1994.

C. Conclusion

Petitioner is entitled to a deduction for alimony paid

during 1994 of $1,000.

III. 1995 Adjustments

A. Alimony

Petitioner claims that, during 1995, pursuant to the

September 8, 1994, order, he made five monthly payments of

alimony (from January through May), each in the amount of $2,500.

For the same reasons as with respect to 1994, petitioner has

failed to prove that, during 1995, he made any of the monthly

payments required by the September 8, 1994, order.

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The parties have stipulated that, during 1995, and in

accordance with the supplemental final judgment, petitioner paid

Ms. Hodson $3,000 in cash. On brief, respondent concedes that,

on account of such payment, petitioner is entitled to a deduction

for alimony paid in 1995 of $3,000. We accept such concession.

Petitioner is entitled to a deduction for alimony paid

during 1995 of $3,000.

B. Personal Exemption Deduction

On petitioner’s 1995 return, he showed Meagan as his

daughter and dependent and, on account thereof, deducted $2,500

as a personal exemption deduction.

Section 151(a) allows a deduction for certain exemption

amounts, including the exemption amount ($2,500 for 1995) for

certain dependents of the taxpayer. See sec. 151(c). As

applicable to this case, the term “dependent” means a daughter of

the taxpayer, over half of whose support for the year is provided

by the taxpayer. See sec. 152(a)(1). Generally, if a child’s

parents are divorced, the child is in the custody of one or both

for the year, and the parents provide more than half of the

child’s support, the custodial parent (the parent with custody

for the greater portion of the year) is treated as having

provided over half of the child’s support for the year, and he or

she may deduct the exemption amount with respect to such child

for the year. See sec. 151(e). Section 1.152-4(b), Income Tax

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Regs., provides: “In the event of so-called ‘split’ custody,

* * * ‘custody’ will be deemed to be with the parent who, as

between both parents, has the physical custody of the child for

the greater portion of the calendar year.”

Petitioner failed to prove that, during 1995, Meagan

received over half of her support from one or both of her

parents. Even if we were to assume that she did, however,

petitioner failed to prove that, as between him and Ms. Hodson,

he had physical custody of her for the greater portion of the

year.5

Petitioner is not entitled to a deduction for the exemption

amount with respect to Meagan for 1995.

C. Vanguard Distribution

Petitioner failed to report the Vanguard distribution

($23,192.18) as an item of gross income on the 1995 Form 1040.

By the supplemental final judgment, the State Court found that

petitioner and Ms. Hodson had stipulated (the stipulation) that

Ms. Hodson would receive “the amount of $55,400 from * * *

[petitioner’s] Capital Accumulation Plan (T-CAP) or from * * *

[his] ESOP, whichever is appropriate, * * * in full settlement of

5

Sec. 152(e)(2) provides a means by which the custodial

parent may permit the noncustodial parent to claim the child as a

dependent for the year. However, petitioner does not claim that

Ms. Hodson signed a written declaration that she would not claim

Meagan as a dependent on her return, nor is there evidence that

he attached any such written declaration to his return as

required by sec. 152(e)(2).

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the back child support ($22,500 as previously Ordered by the

Court * * * ) and the remainder ($32,900) as other equitable

distribution.” The State Court stated its intent to enter a QDRO

against E-Systems (petitioner’s employer) “and the account of

* * * [petitioner] therein, of which $22,500 is for a child

support obligation and $32,900 is for equitable distribution.”

We think that the following are fair inferences to be drawn

from the (1) supplemental final judgment, (2) check, in the

amount of $23,192.18, payable to Meagan, and (3) Form 1099R,

received by petitioner and evidencing the Vanguard distribution:

The Vanguard distribution was from either the T-Cap or ESOP, both

of which were employer-sponsored benefit plans in which

petitioner was a participant on whose behalf an account was

maintained; the Vanguard distribution was made pursuant to the

stipulation of petitioner and Ms. Hodson that she would receive

$55,400 from those accounts ($32,900 as an equitable distribution

and $22,500 (plus interest) in satisfaction of petitioner’s child

support obligation); the Vanguard distribution liquidated

petitioner’s obligation pursuant to the stipulation to pay

overdue child support. We find accordingly.

The parties appear to agree that the Vanguard distribution

was from a tax-exempt employees’ trust described in section

401(a) (an employees’ trust), and, therefore, the taxability of

such distribution is determined under section 402. Section

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402(a) provides, with detail not here relevant, that, unless

otherwise provided in section 402, distributions by any

employees’ trust are taxable to the distributee. We have held

that the distributee of a distribution from an employees’ trust

ordinarily is the participant or beneficiary (in or of the plan

under which the employees’ trust was established) who is entitled

to receive the distribution. See Darby v. Commissioner, 97 T.C.

51, 58 (1991) (“In particular, the mere fact that the

distribution is made by the plan administrator to A rather than

to B does not make A the distributee.”). Nevertheless, section

402(e)(1)(A) provides:

(A) Alternate Payee Treated as Distributee.--For

purposes of subsection (a) and section 72, an alternate

payee who is the spouse or former spouse of the

participant shall be treated as the distributee of any

distribution or payment made to the alternate payee

under a qualified domestic relations order (as defined

in section 414(p)).

Section 414(p) contains detailed specifications for a QDRO. We

need not set forth those specifications.

Pursuant to section 402(e)(1)(A), petitioner can escape

taxation on the $23,192.18 distribution only if it were made to

petitioner’s spouse or former spouse. The supplemental final

judgment provided that Meagan was to receive $22,500 from one of

petitioner’s two pension plans, and, in fact, she did

subsequently receive a distribution from one of petitioner’s

pension plans pursuant to that supplemental final judgment.

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Meagan is petitioner’s child, not his spouse or former spouse;

therefore, even if the supplemental final judgment satisfied the

requirements for a QDRO, petitioner is the distributee and

subject to tax on the $23,192.18. If the supplemental final

judgment is not a valid QDRO, petitioner is the distributee for

purposes of section 402(a) and is subject to tax on the amount

distributed. Hawkins v. Commissioner, 102 T.C. 61, 77 (1994);

Karem v. Commissioner, 100 T.C. 521, 531 (1993) .

Moreover, in the supplemental final judgment, the State

Court states that a QDRO “shall issue” and “a single QDRO is

hereby Ordered to be entered against E-Systems and the account of

the Former Husband therein”. In order paragraph number 10 of the

supplemental final judgment, the court retains jurisdiction: “to

enter the required QDRO”. We assume that the State Court

intended an additional and separate order to implement its intent

to issue a QDRO. Petitioner has, however, failed to show that

such order was entered or, if entered, met the specifications of

section 414(p). Clearly, petitioner is aware of the importance

of a QDRO in establishing Ms. Hodson as an alternate payee for

purposes of section 402(e)(1)(A), since he has proposed that we

find that the Vanguard distribution “was made via a Qualified

Domestic Relations Order”. Petitioner has not claimed any

difficulty in obtaining a copy of any QDRO entered by the State

Court. We infer that, since no such order is in evidence, either

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no such order was entered or, if entered, did not meet the

specifications of section 414(p). See Wichita Terminal Elevator

Co. v. Commissioner, 6 T.C. 1158, 1165 (1946) (“the failure of a

party to introduce evidence within his possession and which, if

true, would be favorable to him, gives rise to the presumption

that if produced it would be unfavorable”), affd. 162 F.2d 513

(10th Cir. 1947).

We find that the Vanguard distribution is taxable to

petitioner, as distributee, under section 402(a). Because the

Vanguard distribution was made in satisfaction of petitioner’s

obligation to pay overdue child support, it does not give rise to

a deduction for alimony paid. See sec. 71(c).

IV. Conclusion

We sustain respondent’s determination of a deficiency except

to the extent that petitioner paid alimony to Ms. Hodson of

$1,000 in 1994 and $3,000 in 1995.

Decision will be entered

under Rule 155.