- 6 -
Commissioner, T.C. Memo. 1997-15. General financial or emotional
hardship is not an exception from the section 72(t) additional
tax on early retirement plan distributions. Milner v.
Commissioner, T.C. Memo. 2004-111. Although the divorce
settlement may have been difficult for Mr. Ahmad, general
hardship is not one of the enumerated exceptions in section
72(t)(2).
Petitioners also assert that they are not liable for the
section 72(t) penalty because Mr. Ahmad suffers from fibromyalgia
and chronic fatigue syndrome. Distributions attributable to a
disability within the meaning of section 72(m)(7) are exempted
from the 10-percent penalty. Sec. 72(t)(2)(A)(iii); Meyer v.
Commissioner, T.C. Memo. 2003-12. Under section 72(m)(7), an
individual shall be considered to be disabled if he is unable to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be
expected to result in death or to be of long-continued and
indefinite duration. Whether the impairment constitutes a
disability is to be determined with reference to all facts in the
case. Sec. 1.72-17A(f)(2), Income Tax Regs.
Mr. Ahmad testified that he was employed by the State of
California in 2001 and regularly worked 8-hour days. His claimed
disabilities evidently did not prevent him from engaging in a
gainful activity in 2001. Moreover, Mr. Ahmad wired the proceeds
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011