Joseph Jones - Page 11

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          Skelly Oil Co., 394 U.S. 678, 684 (1969); Charles Ilfeld Co. v.             
          Hernandez, 292 U.S. 62, 68 (1934).  Only if the language of the             
          statute compelled it “would we reach a result apparently so at              
          odds with accepted tax policy.”  Darby v. Commissioner, supra at            
          68.                                                                         
               We find that petitioner did not have a basis in the 1999               
          distribution from his section 401(k) plan, and that petitioner              
          properly included the full distribution in his 1999 gross income.           
          Accordingly, we hold that petitioner is liable for the 10-percent           
          additional tax under section 72(t) on the $50,674 distribution              
          from his TESPHE account.                                                    
               We have considered all of the other arguments made by                  
          petitioner, and, to the extent that we have not specifically                
          addressed them, we conclude they are without merit.                         
               Reviewed and adopted as the report of the Small Tax Case               
          Division.                                                                   
               To reflect the foregoing,                                              


                                                  Decision will be entered            
                                             for respondent.                          













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