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year” of the distribution. Thus, the section 72(t)(2)(B)
exception is not available to petitioners in 2000 because they
did not pay any deductible medical expenses during that year.3
Petitioners argue in their petition that they were advised
by petitioner’s employer that the additional tax would not apply.
They further argue that the filing instructions provided by the
Internal Revenue Service state that the retirement plan should
have noted petitioner’s liability for the penalty on the Form
1099-R, Distributions From Pensions, Annuities, Retirement or
Profit-Sharing Plans, IRAs, Insurance Contracts, etc., but that
the form did not reflect any such liability. Finally,
petitioners argue that they “have all medical receipts, bills,
statements showing [petitioner’s] out of pocket payments made
following the withdrawal.”
We do not question whether petitioners used the distributed
funds for petitioner’s medical expenses. However, regardless of
whether petitioner’s employer provided misguided advice, or
whether her retirement plan failed to issue her a properly
completed form,4 the requirements of section 72(t)(2)(B) must be
3We note that even if petitioner had received the
distribution in 2001, the sec. 72(t)(2)(B) exception would have
applied only to $8,724.13 of the $17,222.69 distribution, which
was the amount of petitioners’ deductible medical expenses in
that year.
4Petitioners, in their argument concerning the form issued
by the retirement plan, point to the instructions for line 30 of
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