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Respondent determined a deficiency in petitioner’s Federal
income tax for the taxable year 1999 in the amount of $5,067.2
The sole issue for decision is whether petitioner is liable
under section 72(t) for the 10-percent additional tax on an early
distribution from a qualified retirement plan. We hold that he
is.
Background
Some of the facts have been stipulated, and they are so
found. Petitioner resided in Duluth, Georgia, at the time that
his petition was filed with the Court.
Petitioner was employed by Ford Motor Co. (Ford) during
1999. Petitioner has been employed by Ford for 30 years.
As an employee of Ford, petitioner participated in Ford’s
Tax-Efficient Savings Plan for Hourly Employees (TESPHE). TESPHE
is a defined contribution plan, qualified under sections 401(a)
and 401(k). TESPHE is managed by Fidelity Investments
(Fidelity).
In accordance with TESPHE’s guidelines, Ford employees can
choose to make pretax or after-tax contributions to their TESPHE
account. Petitioner made pretax contributions to his TESPHE
account. Pretax contributions cannot be withdrawn from TESPHE
prior to age 59� unless the participant is terminated or
demonstrates a financial hardship. However, TESPHE allows
2 All numbers are rounded to the nearest dollar.
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