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Specifically, petitioner received a distribution of $14,793.94
from the SEP plan and a distribution of $10,000 from the Keogh
plan. Petitioner received a Form 1099-R from Northwestern,
showing premature taxable distributions totaling $24,793.94 with
no exceptions applicable. During the year 1992, petitioner was
36 years of age.
On his 1992 Federal income tax return, petitioner reported
the total distributions of $24,793.94 as gross income.
Petitioner did not report, however, liability for the 10-percent
additional tax under section 72(t), claiming that the
distributions were excepted from the additional tax due to
financial hardship. In the notice of deficiency, respondent
determined that petitioner was liable for the 10-percent
additional tax under section 72(t).
The determinations of the Commissioner in a notice of
deficiency are presumed correct, and the burden of proof is on
the taxpayer to prove that the determinations are in error. Rule
142(a); Welch v. Helvering, 290 U.S. 111 (1933).
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 (as
defined in section 4974(c)), 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
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