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disputes this representation and contends that the amount was
withheld to satisfy the early withdrawal penalty. (This
contention, if valid, would mean $2,148.80 ($7,656.80 less
$5,508) would remain unexplained. This point was not addressed
at trial).
On or about May 12, 1997, Union Bank issued petitioner a
check in the amount of $33,428.29. The amount of the check
reflected the 401(k) distribution of $55,404.63 less the
$21,976.34 total withholdings made by Union Bank. About May 16,
1997, petitioner negotiated the check at a branch of First Union
National Bank.
Respondent’s position is that the $7,656.80 additional
withholding from petitioner’s early 401(k) distribution was not
in satisfaction of the section 72(t) 10-percent additional tax.
Respondent states that the evidence proves that the $7,656.80
withholding made by Union Bank was a payoff in satisfaction of a
loan and that petitioner is liable for the section 72(t) 10-
percent additional tax.
Early distributions from a qualified retirement plan are
subject to a 10-percent additional tax, with exceptions not
applicable in this case. Sec. 72(t). Petitioner does not
contest that the section 72(t) 10-percent additional tax applies
to the distribution of $55,404.63 made by Union Bank to him from
his 401(k) account.
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