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years of age in 1997 when the withdrawal was made.
In a notice of deficiency, respondent determined a
deficiency in the amount of $3,886. This amount represented a
10-percent additional tax on an early IRA distribution pursuant
to section 72(t).
Under section 408(d)(1), a distribution from an IRA is
taxable to the distributee in the year of distribution in the
manner provided under section 72. Section 408(d)(3) provides an
exception to the general rule for certain “rollovers” by the
distributee; namely, where a distribution is paid to the
distributee, and the distributee transfers the entire amount of
the distribution to an IRA or an individual retirement annuity
within 60 days of receipt.
Section 72(t)(1) provides for a 10-percent additional tax on
distributions from qualified retirement plans. Section 72(t)(2)
excludes qualified retirement plan distributions from the 10-
percent additional tax if the distributions are: (1) Made on or
after the date on which the employee attains the age of 59-1/2;1
(2) made to a beneficiary (or to the estate of the employee) on
or after the death of the employee; (3) attributable to the
employee’s being disabled within the meaning of section 72(m)(7);
(4) part of a series of substantially equal periodic payments
1 For the purpose of sec. 72(t), the term “employee” also
refers to participants in individual retirement accounts. Sec.
72(t)(5).
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Last modified: May 25, 2011