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Court Rules of Practice and Procedure.
Respondent determined a deficiency of $4,199 in petitioner’s
1998 Federal income tax. The issue for decision is whether
petitioner is subject to the 10-percent additional tax under
section 72(t)(1) on a distribution from a qualified retirement
plan.
Background
Petitioner resided in Roseville, California, when the
petition was filed. Prior to and during the year at issue
petitioner worked as a registered nurse. At some point during
1998, petitioner apparently became convinced from watching
television that, according to a recently enacted law, early
distributions from qualified retirement plans no longer were
subject to a 10-percent additional tax if the distributions were
used to pay the taxpayer’s qualified higher education expenses.
Petitioner telephoned respondent’s assistance number and spoke
with a representative. As a result of her conversation with
respondent’s representative, petitioner had the impression that
the information she had heard on television was correct.
Before hearing about the new law, petitioner had been
considering continuing her education in order to advance her
career as a nurse. After speaking with respondent’s
representative, petitioner withdrew $41,993 from a qualified
retirement plan account at the Lincoln National Life Insurance
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Last modified: May 25, 2011