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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
72(t).
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
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