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3. Whether petitioners are liable for the 10-percent
additional tax determined by respondent under section 72(t).
We hold they are.
Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the years in issue. Rule
references are to the Tax Court Rules of Practice and Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated. The stipulations
and the exhibits attached are incorporated herein by this
reference, and the facts contained therein are so found.
Petitioners resided in West Bloomfield, Michigan, when they
petitioned the Court.
Before and during the years in issue, petitioners were the
owners, operators, employees, and shareholders of Erie
Industries, Inc. (Erie Industries). Erie Industries is a
subchapter S corporation engaged in precision machining and
grinding. At all times, petitioners were at least 10-percent
shareholders in the corporation.
Erie Industries maintained the Plan, which was a defined-
contribution profit-sharing plan established to operate as a
qualified plan described in section 401(a). The Erie Industries,
Inc. Employees' Profit Sharing Trust was formed under the Plan.
Wayne was the Plan trustee, and Erie Industries was the Plan
administrator. Petitioners participated in the Plan.
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