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Petitioner testified that when he received the 1997
distribution from his 401(k) account he “believed all of the
taxes and penalties had been withdrawn from it, as the company
stated they would do when they distributed the monies.”
Petitioner claims he was unaware of any outstanding loan balance.
Petitioner’s boldfaced testimony was that he “had not taken a
loan out.” He further testified that his only withdrawal from
the 401(k) plan “was to settle a divorce agreement.”
Petitioner’s Divorce Agreement contained no indication of any
required withdrawal from petitioner’s 401(k) account. Although
petitioner provided a retirement plan statement from Mitsubishi
for the last quarter of 1994, he failed to provide any such
statement for any period ending after 1994. Petitioner claimed
that he lost these records.
A statement provided by Union Bank reflecting the total
withholdings from petitioner’s 1997 Mitsubishi 401(k) account
distribution showed that the $7,656.80 withholding represented a
“Loan Payoff”. According to Union Bank, the loan had been made
to petitioner in 1996. A letter dated May 10, 2001, from Wanda
Green, a Trust Officer at Union Bank, stated that petitioner
received an $8,000 loan check dated November 20, 1996, from his
Mitsubishi 401(k) account. A Union Bank “Miscellaneous Cash and
Disbursements MEA [Mitsubishi Electric America] 401(k) Loan
Account from 1/01/96 to 12/31/96" report reflected a November 20,
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Last modified: May 25, 2011