Brent Allan Pulliam - Page 6

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          premature distributions from the two qualified plans were exempt            
          from the additional tax of section 72(t) because there are no               
          competing claims from which a determination of priorities has to            
          be made.                                                                    
               Petitioner also contends that the limited exceptions to the            
          section 72(t) additional tax violate his constitutional right of            
          equal protection.  Specifically, petitioner argues that the death           
          and disability hardship exceptions to section 72(t) are "under-             
          inclusive, denying exceptions for general hardship circumstances,           
          thereby treating similarly situated persons in a substantially              
          different manner."  The "hardship exceptions" in section 72(t)              
          for death and disability do not involve either a fundamental                
          interest or a suspect classification.  Accordingly, the proper              
          level for review is the rational basis test--i.e., whether the              
          classification bears a reasonable relationship to some legitimate           
          government purpose.  The legislative history of section 72                  
          provides that the section was enacted to prevent the diversion of           
          retirement savings for nonretirement purposes and to recapture a            
          measure of the tax benefits provided by the deferral of income              
          tax through retirement plans.  At the same time, Congress                   
          recognized that it was appropriate to provide, under limited                
          circumstances, an exemption from the tax for certain withdrawals            
          on account of specified hardships.  H. Rept. 99-426 (1985), 1986-           
          3 C.B. (Vol.2) 1, 727-729; S. Rept. 99-313 (1985), 1986-3 C.B.              





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