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Moreover, the record reflects that petitioner received cash
amounts representing about 90 percent of his Plan interest and
that about 10 percent of his Plan account was tied up in illiquid
assets that were supposedly to be placed in the Kansas bank IRA.
For reasons that are not explained in our record, as of 1991, the
illiquid assets had not been trusteed or placed in petitioner's
IRA account, and the $27 custodial fee was returned to
petitioner. These illiquid assets were not distributed during
1990. Consequently, the distribution of cash to petitioner in
that year did not represent the full balance standing to his
account in the Plan and failed to qualify as a lump-sum
distribution.
Petitioner also argues that Congress did not intend that
taxpayers be subject to the full impact of the tax in these
situations. It is true that petitioner's distribution was made
due to circumstances beyond his control. The statute, however,
requires that the distribution of a taxpayer's entire account
during the year be made in specific circumstances, which did not
occur here. In addition, Congress provided a method for
deferral, yet petitioner failed to comply with the statutory
requirements to obtain such deferral. Accordingly, petitioners
are not entitled to section 402 relief, in the form of a tax-free
rollover or income averaging, for 1990, the year of the
distribution.
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