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petitioner is liable for the 10-percent additional tax imposed
under section 72(t) on early distributions from qualified
retirement plans.
Some of the facts were stipulated, and those facts, with the
annexed exhibits, are so found and are incorporated herein by
reference. At the time the petition was filed, petitioner's
legal residence was Walnut Creek, California.
Prior to and during the year at issue, petitioner was a
self-employed insurance agent, specializing in the sale of long-
term care insurance. Petitioner represented the Aetna and CNA
insurance companies.
During 1992, petitioner was participating in two retirement
plans offered by Northwestern Mutual Life Insurance Co.
(Northwestern). One plan was a simplified employee pension (SEP)
plan for self-employed individuals qualified under section 408(b)
and (k); the other was a Keogh plan qualified under section
401(a). Each of these plans was funded 100 percent by
petitioner. Petitioner did not represent or sell any insurance
contracts offered by Northwestern.
Beginning in 1988 and continuing in 1992, petitioner
sustained a downturn in sales of insurance policies. As a
consequence, petitioner's income was reduced drastically. In
order to pay off his debts, petitioner made early withdrawals
totaling $24,793.94 from his two retirement plans during 1992.
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