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instructions as to opening the IRA at the Kansas bank, but that
account was never funded. After petitioner learned his approach
was inadequate, he put the remaining funds into a valid IRA.
Even though a part of the plan distribution was ultimately placed
into a valid IRA, petitioners failed to roll over any part of the
$246,647.68 cash distribution within 60 days in a manner that
would meet the requirements for deferral under section 402(a)(5).
Petitioner contends that the holding in Wood v.
Commissioner, 93 T.C. 114 (1989), is applicable here. That case
involved a distribution of a profit-sharing plan followed by the
taxpayer's establishment of an IRA. Due to a bookkeeping error
by the IRA trustee, certain of the trustee's records indicated
that part of the distribution had not been transferred to the IRA
account within the required 60 days. In Wood, we held that the
trustee's bookkeeping error did not preclude the taxpayer's
rollover treatment because, in substance, the taxpayer had met
the statutory requirements.
Here, petitioner had established an IRA, yet, due to
petitioner's lack of understanding, he failed to make a timely
transfer of the distribution to an IRA that met the statutory
requirements. Hence, the distribution made in 1990 is taxable as
determined by respondent.
Respondent also determined that petitioners were liable for
the 10-percent additional tax for early distribution under
section 72(t). That section provides for an additional tax for
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