Michael J. Barkley - Page 17

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               The record demonstrates that petitioner was the covered                
          employee and plan participant.  The record also demonstrates that           
          the 1998 distribution was attributable to petitioner’s retirement           
          and not to any disability of his.  Because section                          
          72(t)(2)(A)(iii) requires that a distribution be attributable to            
          the employee’s being disabled in order for the exception to the             
          10-percent additional tax to apply, we hold that petitioner does            
          not qualify for the section 72(t)(2)(A)(iii) exception.                     
          IV. Section 6651(a)(1) Addition to Tax                                      
               Section 6651(a) imposes an addition to tax for failure to              
          file a return in the amount of 5 percent of the tax liability               
          required to be shown on the return for each month during which              
          such failure continues, but not exceeding 25 percent in the                 
          aggregate, unless it is shown that such failure is due to                   
          reasonable cause and not due to willful neglect.  See sec.                  
          6651(a)(1); United States v. Boyle, 469 U.S. 241, 245 (1985);               
          United States v. Nordbrock, 38 F.3d 440, 444 (9th Cir. 1994);               
          Harris v. Commissioner, T.C. Memo. 1998-332.  A failure to file a           
          timely Federal income tax return is due to reasonable cause if              
          the taxpayer exercised ordinary business care and prudence and              
          nevertheless was unable to file the return within the prescribed            
          time.  See sec. 301.6651-1(c)(1), Proced. & Admin. Regs.  Willful           
          neglect means a conscious, intentional failure to file or                   
          reckless indifference.  See United States v. Boyle, supra at 245.           






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