Stephen R. Jones - Page 2




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                                 MEMORANDUM OPINION                                   
               LARO, Judge:  This case is before the Court fully                      
          stipulated.  See Rule 122.  Petitioner petitioned the Court to              
          redetermine respondent’s determination of a deficiency in Federal           
          income tax for petitioner’s 1994 taxable year of $27,351 and an             
          addition to tax under section 6651(a)(1) of $6,838.                         
               The issues for decision are:                                           
               1.   Whether petitioner’s gross income includes a $68,121              
          distribution to him from his individual retirement annuity (IRA).           
          We hold it does.                                                            
               2.   Whether petitioner is subject to the 10-percent                   
          additional tax for early distributions under section 72(t).  We             
          hold he is.                                                                 
               3.   Whether petitioner is liable for the addition to tax              
          pursuant to section 6651(a)(1) for failure to file his 1994                 
          Federal income tax return timely.  We hold he is.                           
               Unless otherwise indicated, section references are to the              
          Internal Revenue Code in effect for the year in issue.  Rule                
          references are to the Tax Court Rules of Practice and Procedure.            
          Dollar amounts are rounded to the nearest dollar.                           
                                     Background                                       
               When the petition in this case was filed, petitioner resided           
          in Palm Desert, California.  On March 21, 1990, petitioner                  
          established an IRA with the Prudential Insurance Company of                 






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