I received a distribution as court-ordered divorce proceedings from ex-spouse's retirement fund and had to cash in for living expenses. When I added amount distributed under TT's exception to an alternate payee under a qualified domestic relations order, the 10 % penalty was removed from the ongoing calculations. Yet other community sources say I still owe the 10% penalty. I prefer the TT version, but do not want to irritate the IRS. Which version is correct and why does TT say no early distribution penalty?