James E. Copley and Cynthia R. Copley - Page 5

          withdrawal of the funds on or about October 31, 1990, and his               
          deposit of the same into a personal checking account qualifies as           
          a taxable distribution.  We agree.                                          
               The distribution that petitioner received from the CSRS is             
          subject to taxation under section 72 pursuant to section 402(a).            
          CSRS is a plan that meets the requirements of section 401(a), and           
          the law is well established that section 72 is applicable to                
          distributions received pursuant to the CSRS.  Malbon v. United              
          States, 43 F.3d 466, 468 (9th Cir. 1994); Shimota v. United                 
          States, 21 Cl. Ct. 510, 519-520 (1990), affd. 943 F.2d 1312 (Fed.           
          Cir. 1991); sec. 1.72-2(a)(3)(iii), Income Tax Regs.  A lump sum            
          payment from the CSRS is treated as a payment under an annuity              
          contract.  Roundy v. Commissioner, T.C. Memo. 1995-298; Kirkland            
          v. Commissioner, T.C. Memo. 1994-220.  Such payment is subject to           
          tax in the year in which it is received as a payment under an               
          annuity contract that is "not received as an annuity" under                 
          section 72(e)(1)(A).  Guilzon v. Commissioner, 97 T.C. 237, 243             
          (1991), affd. 985 F.2d 819 (5th Cir. 1993).                                 
               At the time petitioner withdrew the funds from the Fidelity            
          IRA and deposited them into his personal checking account, the              
          funds became taxable income.  Petitioner's argument that whatever           
          tax was due was withheld by Fidelity prior to his withdrawal of             
          the funds is unfounded.  First, it is not the responsibility of             
          financial institutions to withhold income taxes from savings                
          withdrawals, and petitioner presented no documentation that such            

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