I.R.C. Sec. 104(a)(1) does not exclude from income payments that are made from a disability pension to a former spouse under a qualified domestic relations order (QDRO). That is the result, the IRS determined, even if the amounts are excluded from income under I.R.C. Sec. 104(a)(1) when they are paid to the original recipient of the payments. The facts involved a situation when a taxpayer receiving an income stream got divorced and the payment rights were divided under a QDRO. The IRS determined that the entire amount paid to the former spouse is includible in taxable income. The result is that non-taxable income is converted to taxable income. Priv. Ltr. Rul. 201521009 (Feb. 9, 2015).
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