John and Michele McGovern - Page 7

                                        - 6 -                                         
          to the $12,880.04 distribution unless an exception applies.                 
               Section 72(t)(2)(E) provides that the 10-percent additional            
          tax does not apply to “Distributions to an individual from an               
          individual retirement plan” for “qualified higher education                 
          expenses”.  Petitioners contend that this exception applies to              
          the present case.  While the parties do not dispute that tuition            
          payments made and education fees paid to Villanova University               
          constitute “qualified higher education expenses”, the issue is              
          whether the remaining requirements of section 72(t)(2)(E) are               
               The $12,880.04 distribution from petitioner’s TSP is not a             
          distribution from an “individual retirement plan”.  An IRA and a            
          TSP are separately defined by the Internal Revenue Code.  Section           
          7701(a)(37) provides that an IRA means “an individual retirement            
          account described in section 408(a)”.  Section 7701(j)(1)                   
          provides that a TSP is treated as a trust described in                      
          section 401(a).  Compare sec. 7701(a)(37) with sec. 7701(j)(1).5            

                         provisions of subchapter III of chapter 84 of                
                         title 5, United States Code, and section 8351                
                         of such title 5, an election whether the                     
                         contribution will be made to the Thrift                      
                         Savings Fund or received by the employee or                  
                         Member in cash.                                              
          See also 5 U.S.C. sec. 8440(a)(1) (2000).                                   
               5  Sec. 7701(a)(37) refers to sec. 408 and provides:                   
                    SEC. 7701(a).  When used in this title, where not                 
               otherwise distinctly expressed or manifestly                           

Page:  Previous  1  2  3  4  5  6  7  8  9  10  Next

Last modified: May 25, 2011