In this case, an ex-husband participated in his employer's 401(k) and his ex-wife was an alternate payee. The couple's divorce decree said that the ex-wife was liable for income tax on distributions. In 2009, the ex-wife (petitioner) received a distribution with she reported as nontaxable pension and annuity income. The IRS disagreed with that characterization and imposed an accuracy-related penalty. The court determined that the distribution was includible in petitioner's income because it was not received as part of a divorce decree but as a transfer of property made incident to divorce. Likewise, her ex-husband's adjusted basis (0) carried over to petitioner. In addition, the petitioner did not opt to roll the distribution over into an eligible IRA within 60 days of receipt. Petitioner received the distribution pursuant to a QDRO which provided that petitioner was liable for any tax on distribution. Accuracy-related penalty upheld. Weaver-Adams v. Comr., T.C. Memo. 2014-73.