- 4 -
additional tax under section 72(t) with regard to the
distribution.
On March 5, 2003, respondent mailed to petitioners a notice
of deficiency in which respondent determined that under section
72(t) the $55,555 distribution petitioner received constituted an
early distribution on which the 10-percent additional tax in the
amount of $5,555 was due.
At the time of trial, petitioner held two jobs, working
approximately 60 hours per week.
OPINION
Generally, under section 72, a 10-percent additional tax is
imposed against a taxpayer on that portion of a distribution from
a qualified retirement plan that is includable in the taxpayer’s
gross income. Sec. 72(t)(1). Under section 72(t)(2), certain
exceptions to the 10-percent additional tax are provided, none of
which apply here.1
1 For example, under sec. 72(t)(2)(A)(i), an exception to
the 10-percent additional tax on an early distribution from a
qualified retirement plan is provided where, on the date of the
distribution, a taxpayer has attained the age of 59-1/2. Under
sec. 72(t)(2)(A)(v), an exception is provided where a taxpayer,
having attained the age of 55, receives a distribution after he
is no longer employed by his former employer that administered
the plan. As stated, petitioner was only 53 years of age when
his employment was terminated and when he received his
distribution.
Under sec. 72(t)(2)(B), another exception is provided where
a taxpayer uses the proceeds of an early distribution to pay for
(continued...)
Page: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011