Debra Sue Tussey - Page 5

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          owed for 1999 was "none" should mean that she does not owe any              
          additional tax.                                                             
               Respondent concedes that $10,000 of the money that                     
          petitioner used to buy a house qualifies under section                      
          72(t)(2)(F) and (8)(B) for exclusion from the additional tax on             
          early distributions from a qualified retirement plan.  Respondent           
          contends, however, that the entire distribution must be included            
          in income and that the amount of the distribution in excess of              
          $10,000 is subject to the additional 10-percent tax on early                
          distributions from qualified retirement plans.  As to the letter            
          of March 18, 2002, respondent's position is that the letter was             
          generated due to an abatement of the premature assessment of the            
          deficiency in this case and has no legal significance here.                 
               As there are no factual issues in dispute in this case,                
          section 7491 is not implicated.  Petitioner testified that                  
          unnamed IRS employees told her that if her IRA distributions were           
          used for the purchase of a new home they were not taxable and               
          there would be no "penalties".  Whether or not petitioner was               
          given incorrect advice by IRS personnel, bad advice is not                  
          binding on the Commissioner.1  Darling v. Commissioner, 49 F.2d             
          111, 113 (4th Cir. 1931), affg. 19 B.T.A. 337 (1930); Fortugno v.           
          Commissioner, 41 T.C. 316, 323-324 (1963), affd. 353 F.2d 429 (3d           

               1Under certain circumstances, however, erroneous written               
          advice may be grounds for abatement of the portion of any penalty           
          or addition to tax attributable to the erroneous advice.  Sec.              

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