What IRS rule might be violated when splitting retirement plan benefits after divorce?

When splitting retirement plan benefits after a divorce, the primary concern is often about the alienation of benefits. The IRS prohibits the alienation of retirement benefits, which means an individual cannot assign or transfer their retirement benefits to someone else before they are actually withdrawn. However, exceptions do exist, such as in the case of a Qualified Domestic Relations Order (QDRO), which allows benefits to be transferred in a divorce settlement without violating this rule. QDROs specifically set out how retirement benefits will be divided, ensuring compliance with IRS regulations.

In contrast, other options like tax deferral, hardship withdrawals, and maximum contributions relate to different aspects of retirement plans but do not directly address the rules surrounding the division of benefits after a divorce. The tax deferral rule deals with when taxes are owed on retirement savings, hardship withdrawal rules pertain to taking money out of retirement plans under specific conditions, and maximum contribution rules limit the amount one can contribute to retirement accounts within a given tax year. While all of these elements are important in the context of retirement planning, they do not specifically pertain to the issue of dividing benefits due to divorce.