Robert C. and Carol S. Jacobsen - Page 10

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                    duration.  An individual shall not be considered                  
                    to be disabled unless he furnishes proof of the                   
                    existence thereof in such form and manner as the                  
                    Secretary may require.                                            
          Respondent argues that petitioners’ claim that Mrs. Jacobsen was            
          disabled is inconsistent with her performance of services in                
          Mr. Jacobsen’s business during 1997.                                        
               Mr. Jacobsen explained that Mrs. Jacobsen’s activities in              
          relation to his business were therapeutic, and we do not believe            
          that a performance of office and administrative tasks at home is            
          inconsistent with disability resulting from heart disease.  We              
          disallowed deductions for car and truck expenses partly because             
          the substantial expenses that were claimed to be business related           
          were unreasonable during the time that petitioners were dedicated           
          to the care of Mrs. Jacobsen.  We are satisfied that she was                
          disabled for purposes of section 72(t) and that petitioners are             
          not liable for the additional tax on the distribution from her              
          retirement plan.                                                            
               Mr. Jacobsen, however, relies on section 72(t)(2)(iv), with            
          respect to the distribution from his retirement plan, claiming              
          that the payments that he received over a period of years were              
          substantially equal.  Under Internal Revenue Service Notice                 
          89-25, Q&A No-12, 1989-1 C.B. 662, 666, there are three methods             
          that may be used to calculate substantially equal annual periodic           
          payments:  (1) Any method that would be acceptable for purposes             
          of calculating the minimum distribution required under section              

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