Philip Lewis Hart - Page 5

                                        - 5 -                                         

          are included in gross income and subject to the Federal income              
          tax.  Sec. 61(a)(1).  Likewise, interest, rental income, and IRA            
          distributions are included in gross income and subject to Federal           
          income tax.  Secs. 1, 61(a)(4), 61(a)(5), 61(a)(9), 61(a)(11),              
          408(d).  Petitioner's income from wages, interest, rent, and IRA            
          distributions is taxable.  We sustain respondent's determinations           
          on these issues.                                                            
               We next consider whether petitioner is liable for the                  
          section 72(t) additional tax.  Distributions from a qualified               
          retirement plan are subject to a 10-percent tax unless an                   
          exception applies.  Sec. 72(t).  A qualified retirement plan                
          includes an IRA.  Secs. 4974(c), 408(a).  Petitioner has offered            
          no evidence that any exception applies in his case.  Sec.                   
          72(t)(2).  Because petitioner received two distributions in 1996            
          from two IRA's, he is liable for the additional tax under section           
               We now decide whether petitioner is liable for an addition             
          to tax pursuant to section 6651(a)(1).  Section 6651(a)(1)                  
          imposes an addition to tax for failure to file a Federal income             
          tax return by its due date, unless the taxpayer establishes that            
          the failure was due to reasonable cause and not willful neglect.            
          Petitioner must prove both reasonable cause and a lack of willful           
          neglect.  Crocker v. Commissioner, 92 T.C. 899, 912 (1989).                 
          "Reasonable cause" requires the taxpayer to demonstrate that he             

Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011