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an individual retirement account (IRA) of petitioner Ray C. Baas
(petitioner).2 Petitioners resided in Metairie, Louisiana, at
the time the petition was filed.
The applicable facts may be summarized as follows.3
Petitioner maintained an IRA with Jackson National Life Insurance
Co. Petitioner was indebted to his former wife for alimony and
child support arrearages of $37,560. In September 1993, the
Domestic Relations Court held petitioner in contempt and ordered
that he be incarcerated for 30 days, suspending the period of
incarceration if petitioner paid $10,000. Petitioner did not pay
the $10,000, but the day of reckoning eventually came. On
January 24, 1995, another hearing was held, and petitioner was
immediately incarcerated for contempt. While incarcerated
petitioner had a revelation and decided that his condition had to
improve. In order to satisfy the $10,000 child support and
alimony arrearages petitioner withdrew $11,7514 from his IRA and
satisfied the court order.
Petitioners reported the $11,751 distribution on their joint
1995 Federal income tax return. They, however, did not pay the
2 Unless otherwise indicated, section references are to
the Internal Revenue Code in effect for the year in issue.
3 The facts are not in dispute, and the issue is primarily
one of law. Sec. 7491, concerning burden of proof, has no
bearing on this issue.
4 All amounts are rounded to the nearest dollar.
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