- 9 - 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).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011