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Issue 2. Section 72(t) Additional Tax
Section 72(t) imposes a 10-percent additional tax on early
distributions from qualified retirement plans. Petitioner was
not yet 59 1/2 when he withdrew the funds from his IRA and the
evidence does not support the applicability of any other
exception from tax under section 72(t)(2). Accordingly,
petitioner is liable for the 10-percent additional tax on early
withdrawal.
Issue 3. Addition to Tax Under Section 6651
Respondent determined an addition to tax under section
6651(a) for petitioner’s failure to file his 1994 Federal income
tax return timely based upon a rate of 25 percent. Section
6651(a)(1) imposes an addition to tax equal to 5 percent per
month of the underpayment up to a maximum of 25 percent for
untimely filed returns. This addition to tax is not imposed if
the failure to file timely was due to reasonable cause and not
due to willful neglect. Petitioner's 1994 Federal income tax
return was due to be filed on April 15, 1995. Petitioner filed
his 1994 Federal income tax return on July 15, 1996. The record
in this case is void of any evidence of the reason for
petitioner’s failure to file his return timely. Accordingly, we
sustain respondent’s determination of an addition to tax under
section 6651(a)(1).
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Last modified: May 25, 2011