- 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
satisfied.
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
4(...continued)
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
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011