Randolph S. Simpson I - Page 2

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               After a concession by petitioner,2 the issues for decision             
          are:  (1) Whether petitioner is liable for the 10-percent                   
          additional tax on an early distribution from a qualified                    
          retirement plan under section 72(t)(1) for the year at issue, and           
          (2) whether petitioner is entitled to deduct $17,900 paid to his            
          former spouse during 1997 as alimony.  The second issue arises              
          out of respondent’s amendment to answer.  The undisputed facts in           
          the record permit the Court to decide the issues without regard             
          to the burden of proof.                                                     
               Some of the facts were stipulated, and those facts, with the           
          annexed exhibits, are so found and are incorporated herein by               
          reference.  At the time the petition was filed, petitioner's                
          legal residence was Houston, Texas.                                         
               During the year at issue, petitioner was employed as a                 
          shuttle bus driver for Avis Rent-A-Car (Avis).  From 1987 to                
          1996, according to petitioner, Avis established and maintained a            
          qualified Employee Stock Ownership Plan (ESOP) in which                     
          petitioner was a participant.  In 1996, the employees of Avis               
          voted to sell their stock held in the ESOP to a private company.            

          the Internal Revenue Code in effect for the year at issue.                  
               2    Petitioner conceded an unreported $469 distribution               
          from the Teachers Retirement System of Texas that was received              
          during 1997, as well as the 10-percent addition to tax under sec.           
          72(t) attributable to that distribution.                                    

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