Jack A. and Theresa Y. Smith - Page 3

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               Respondent determined deficiencies of $10,396 and $1,056 in            
          petitioners’ 1998 and 1999 Federal income taxes, respectively.              
          After concessions by the parties, the sole issue for decision is            
          whether petitioners are liable for the 10-percent additional tax            
          under section 72(t) on a pension distribution of $76,087 received           
          during 1998.                                                                
               This case was submitted fully stipulated pursuant to Rule              
          122.  All of the facts stipulated are so found.  Petitioners                
          resided in Canton, Georgia, at the time they filed their                    
               Section 7491(a) does not apply because this case involves a            
          legal issue.                                                                
               Petitioner retired from the New Orleans Police Department              
          (Police Department) in 1996.  He retired from the Police                    
          Department at age 50, after completing 32 years of service.                 
               During 1998, petitioner received $27,809.40 from his                   
          qualified retirement plan as part of a series of equal periodic             
          payments from that plan.  Respondent concedes that this amount is           
          not subject to the additional tax under section 72(t).                      
               During 1998, petitioner withdrew $76,087 in a lump-sum                 
          distribution of the balance of his qualified retirement plan                
          (lump-sum distribution).  The parties agree that “All of the                
          distributions in this case are distributions from a qualified               
          pension or retirement plan under I.R.C. � 401(a) of a government            

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