Tommy L. and Patricia A. Hobson - Page 2

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               After concessions by the parties, the issues for our                   
          decision for the taxable year 1990 are:                                     
               (1) Whether petitioners received a taxable distribution                
          from Mrs. Hobson’s retirement plan, and if so, whether                      
          petitioners are liable for the additional tax under section 72(t)           
          for an early distribution from such plan.  We hold that the 1990            
          distribution was taxable, and petitioners are subject to the                
          additional tax under section 72(t).                                         
               (2) Whether petitioners are liable for an addition to tax              
          under section 6651(a) for failure to timely file their 1990                 
          income tax return.  We hold that they are not.                              
               (3) Whether petitioners are liable for an accuracy-related             
          penalty under section 6662(a) due to a substantial understatement           
          of income tax.  We hold that they are.                                      
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are found                   
          accordingly.  The stipulation of facts and attached exhibits are            
          incorporated herein.  Petitioners resided in Milwaukee,                     
          Wisconsin, at the time the petition was filed.  Petitioners filed           
          a joint Federal income tax return for taxable year 1990 on                  
          October 28, 1991.  All references to petitioner in the singular             
          refer to Patricia A. Hobson.                                                


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