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System to the Pension System, an election that was unrelated to
petitioner's separation from the service.12
Having concluded that the Transfer Refund was not eligible
for tax-free rollover treatment under section 402(a)(5) as a
"partial distribution", we sustain respondent's income tax
determination for the taxable year in issue.
II. Section 72(t) Additional Tax Issue
We turn next to respondent's determination that petitioners
are liable for the 10-percent additional tax imposed by section
72(t).
Section 72(t) provides for a 10-percent additional tax on
early distributions from qualified retirement plans. Paragraph
(1), which imposes the tax, provides in relevant part as follows:
(1) Imposition of Additional Tax.--If any taxpayer
receives any amount from a qualified retirement plan
* * * , the taxpayer's tax under this chapter for the
taxable year in which such amount is received shall be
increased by an amount equal to 10 percent of the
portion of such amount which is includible in gross
income.
We have already sustained respondent's determination that
the taxable portion of the Transfer Refund is includable in
petitioners' gross income in the year of receipt. Because none
of the exceptions of section 72(t)(2)(A) apply to relieve
12 We acknowledge that petitioner elected to retire on the
same day that he elected to transfer from the Retirement System
to the Pension System. The temporal proximity of these
independent elections is not, however, relevant to our conclusion
of law. Adler v. Commissioner, supra; Hylton v. Commissioner,
supra.
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