Glen L. Wittstadt, Jr. and Lynne M. Wittstadt - Page 16

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               On October 22, 1996, respondent filed a notice of Federal               
          tax lien in the county of petitioners' residence.  Also, by                  
          notice dated December 25, 1996, respondent reminded petitioners              
          that their next payment pursuant to the installment payment                  
          agreement was due on January 8, 1997.                                        
               K. The Adler Case on Appeal                                             
               On June 21, 1996, the Court of Appeals for the Fourth                   
          Circuit decided Adler v. Commissioner, 86 F.3d 378, which vacated            
          and remanded our decision in T.C. Memo. 1995-148.  In Adler v.               
          Commissioner, the Court of Appeals agreed that the phrase "on                
          account of" requires "a causal connection between the employee's             
          separation from service and the distribution from the qualified              
          plan."  86 F.3d at 380.  However, the Court of Appeals construed             
          the phrase "on account of" to mean "incident to" and concluded               
          that the requisite degree of causality required by the operative             
          statute had been satisfied.  In so holding, the Court of Appeals             
          stated:  "As the purpose of the statute [section 402] is to                  
          protect and encourage retirement savings, it is plain that a                 
          distribution to an employee that occurs incident to his                      
          retirement should be entitled to rollover treatment."  86 F.3d at            
               On September 10, 1996, the Solicitor General of the United              
          States decided that a petition for a writ of certiorari would not            
          be filed in respect of Adler v. Commissioner, 86 F.3d 378.  Cf.              
          28 U.S.C. sec. 2101(c)(1994).                                                

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