Daniel R. and Margaret J. Kallmyer - Page 3




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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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