John and Michele McGovern - Page 3

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               Respondent determined a deficiency in petitioners’ 1999                
          Federal income tax of $1,288.  The issue for decision is whether            
          the 10-percent additional tax under section 72(t)(1) applies to             
          the early distribution from petitioners’ Federal Employees’                 
          Thrift Savings Plan.                                                        
               Some of the facts have been stipulated, and they are so                
          found.  The stipulation of facts and attached exhibits are                  
          incorporated herein by this reference.  At the time of filing the           
          petition, petitioners resided at Scranton, Pennsylvania.                    
               During the year in issue, John McGovern (petitioner) was a             
          full-time student at Villanova University School of Law.  Also              
          during the year in issue, petitioner received a lump-sum                    
          distribution of $27,880.04 from his Federal Employees’ Thrift               
          Savings Plan (TSP) and deposited that amount into a personal                
          checking account.  Petitioner rolled over $15,000 of that amount            
          into an individual retirement account (IRA).1  Petitioner used              
          the remaining $12,880.04 to pay tuition and education fees to               
          Villanova University during the 1999 taxable year.  Neither                 
          petitioner attained the age of 59� years during the 1999 taxable            

               1  Respondent did not determine a 10-percent additional tax            
          as to this amount.                                                          

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