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respondent was barred from issuing the notice of deficiency for
the additional tax imposed by section 72(t); (2) whether
respondent had conceded the additional tax under section 72(t) in
a settlement prior to the issuance of the notice of deficiency;
and (3) whether petitioners are liable for the additional tax
under section 72(t) for distributions from individual retirement
accounts (IRA) owned by petitioner Daniel R. Kallmyer
(petitioner). Petitioners resided in Maineville, Ohio, at the
time the petition was filed.
Background
The applicable facts may be summarized as follows.2 Prior
to the distributions at issue, respondent assessed petitioners
for delinquent taxes and sought to collect the amount due.
According to petitioner, a revenue officer threatened to levy
petitioner’s retirement accounts at Vanguard Fiduciary Trust Co.,
Star Bank Cust. Analysts Invest. Trust, and T. Rowe Price Trust
Co. During 1996, petitioner caused the trustees of these
accounts to make distributions of $42,870 from the accounts to
petitioner.
These distributions were deposited into petitioners’
checking account and commingled with other funds. Petitioners
paid $15,000 to satisfy the previously assessed tax liability.
2 The facts are not in dispute, and the issues are primarily
ones of law. Sec. 7491, concerning burden of proof, has no
bearing on the issues at hand.
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Last modified: May 25, 2011