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Transfer Refund. In this regard petitioners point to the fact
that they reported liability for additional tax under section
72(t) on their 1989 income tax return in the amount of $8,445
based on a reported taxable distribution in the amount of $84,447
and on their 1991 income tax return in the amount of $6,909 based
on a reported taxable distribution in the amount of $69,089.7
There are at least two fundamental weaknesses to
petitioners' contention. First, petitioners overlook the fact
that they have commenced a suit for refund against the United
States in the U.S. District Court for the District of Maryland.
Such action involves petitioners' claim for refund relating to
the payment of additional tax under section 72(t) in 1991. In
other words, petitioners are currently seeking the recovery of
taxes allegedly overpaid relating to the reporting of the IRA
distribution in December 1991 and the additional tax under
section 72(t) paid in respect thereof.
Second, petitioners overlook the fact that only 1 taxable
year is pending before this Court and that such year is 1989.
Even though petitioners' litigation expenses relating to their
refund action would be minimized, if not obviated, by our
resolving the issues pertaining to 1991, we simply have no
7 The sum of the two reported distributions, i.e., $84,447 + $69,089 or
$153,536, is slightly less than the taxable portion of petitioner's Transfer
Refund, i.e., $154,447. Accordingly, the sum of the additional taxes under
sec. 72(t) reported by petitioners on their 1989 and 1991 income tax returns
($15,354) is slightly less than the additional tax on the taxable portion of
petitioner's Transfer Refund ($15,448). This difference is unimportant to our
decision.
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