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the date on which the taxpayer attains the age of 59-� are not
“early” and therefore not subject to the additional tax. Sec.
72(t)(2)(A)(i). As relevant to the present case, section
72(t)(2)(A)(iii) provides an exception for distributions
“attributable to the employee’s being disabled within the meaning
of subsection (m)(7)”.11 There are also limited exceptions
available for distributions made to an employee for medical care
expenses, sec. 72(t)(2)(B),12 and for qualified higher education
expenses, sec. 72(t)(2)(E).
Petitioners contend that the exception under section
72(t)(2)(A)(iii) applies because Mr. Keeley was disabled during
the years in issue because of severe depression that petitioners
thought was indefinite and for which Mr. Keeley is still under
medical treatment. On the other hand, respondent argues that Mr.
Keely was not disabled because “a long-term psychiatric illness
where petitioner [Mr. Keeley] is able to work and where there
wouldn’t be a need for some type of constant treatment” is
inconsistent with the definition of disability under section
11 For purposes of sec. 72(t), the term “employee” includes
participants in individual retirement plans. Sec. 72(t)(5).
12 In the petition, petitioners appear to contend that the
exception for medical expenses under sec. 72(t)(2)(B) may apply.
However, petitioners did not present any evidence in support of
this contention, presumably because their unreimbursed medical
and dental expenses on both returns did not exceed 7.5 percent of
their adjusted gross income. See sec. 213(a); Dwyer v.
Commissioner, 106 T.C. 337, 343 (1996).
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