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Respondent determined a deficiency in petitioner's Federal
income tax of $2,901 for 1998. The issues for decision are:
(1) Whether petitioner may deduct the Federal income tax withheld
from a distribution from an Individual Retirement Account (IRA),
and (2) whether petitioner is liable for the 10-percent
additional tax on an early distribution from a qualified
retirement plan.
The stipulated facts and exhibits received into evidence are
incorporated herein by reference. At the time the petition in
this case was filed, petitioner resided in Jennings, Oklahoma.
Background
In 1994, petitioner rolled over an amount from his 401(k)
profit sharing plan at Moore Corporation into an IRA, a qualified
retirement plan, at Payne County Bank (PCB) in Perkins, Oklahoma.
On November 14, 1997, the District Court In And For Lincoln
County, State of Oklahoma, issued a Qualified Domestic Relations
Order (QDRO) in the case of Alvetta J. Mills v. Larry J. Mills.
The QDRO ordered PCB to segregate for the benefit of Alvetta
Mills, the alternate payee, the sum of $17,745 along with the
interest accruing between November 14, 1997, until the date of
distribution.
Petitioner signed on January 10, 1998, an "IRA Distribution
Form", containing several sections, including: (1) "IRA Owner
Information"; (2) "Distribution Reason"; (3) "Payment
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