Brian P. Keeley and Mary G. Keeley - Page 3

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               Respondent determined deficiencies in petitioners’ Federal             
          income taxes for the taxable years 1997 and 1998 in the amounts             
          of $5,400 and $1,228, respectively.2                                        
               After a concession by respondent,3 the issue for decision is           
          whether petitioners are liable under section 72(t) for the 10-              
          percent additional tax on early distributions from qualified                
          retirement plans.  We hold that they are.                                   
          Background                                                                  
               Some of the facts have been stipulated, and they are so                
          found.  Petitioners resided in Chicago, Illinois, at the time               
          that their petition was filed with the Court.                               
               Petitioner Mary G. Keeley (Mrs. Keeley) worked part-time for           
          the West Chicago School District in 1997 for a time period not              
          disclosed in the record.  From the end of December 1997 to the              
          present, Mrs. Keeley has been working for Tyndale House                     
          Publishers.                                                                 
               Petitioner Brian P. Keeley (Mr. Keeley) worked as a leasing            
          manager with Hughes Enterprises, a commercial laundry equipment             
          distributor, for some time until August 1996.  In August 1996,              
          Mr. Keeley left Hughes Enterprises because he was dissatisfied              
          with the annual reduction in his base salary and commission                 


               2  All numbers are rounded to the nearest dollar.                      
               3  At trial, respondent conceded the erroneous disallowance            
          of a $400 child tax credit that petitioners claimed in 1998.                





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