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the clear intent of Congress to prevent voluntary withdrawals, we
decided that the penalty was inapplicable. Id. at 291.
Petitioners’ reliance on Larotonda v. Commissioner, supra,
is misplaced. Here, respondent did not levy on the retirement
accounts. Petitioners made voluntary withdrawals from the
accounts and then satisfied their delinquent tax liability by
paying $15,000 out of those withdrawals. The excess withdrawals
were used by petitioner for other purposes.4 We decline to
extend the holding of Larotonda to circumstances such as here,
where petitioners willingly made withdrawals from the retirement
accounts and had actual possession of those distributions prior
to using a portion of the distributions for the payment of the
preexisting tax liability. See Czepiel v. Commissioner, T.C.
Memo. 1999-289; cf. Murillo v. Commissioner, T.C. Memo 1998-13
(distributions from retirement accounts forfeited held not
subject to the section 72(t) additional tax), affd. without
published opinion on other issues 166 F.3d 1201 (2d Cir. 1998).
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
4 Petitioner claims that $19,000 of the distributions was used
to pay the tax incurred during the year from the distributions.
The facts belie this assertion. Petitioners did not even report
the distributions.
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