Basman Ahmad and Khitam Amerneh - Page 8

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          from the early distribution to Mr. Sulieman to reimburse him for            
          losses associated with the Angola Road property.  There is no               
          evidence in the record that suggests the early distribution was             
          attributable to Mr. Ahmad’s afflictions.  Accordingly, the                  
          exception in section 72(t)(2)(A)(iii) offers no relief to                   
               Petitioners also maintain that the section 72(t) penalty is            
          inapplicable because Mr. Ahmad was a student at the University of           
          Toledo in 2001.  Under section 72(t)(2)(E), the 10-percent                  
          addition to tax does not apply to distributions from individual             
          retirement plans for higher education expenses.  An individual              
          retirement plan is an individual retirement account (IRA) or an             
          individual retirement annuity.  Sec. 7701(a)(37).  In this case,            
          Mr. Ahmad received an early distribution from the Ohio PERS,                
          which is a “qualified retirement plan” under section 4974(c).               
          Freese v. Commissioner, T.C. Memo. 1996-224.  Since Mr. Ahmad               
          received his distribution from a qualified retirement plan rather           
          than an individual retirement plan, the section 72(t)(2)(E)                 
          exception is unavailable to petitioners.                                    
               Finally, petitioners argue that the section 72(t) penalty              
          should be waived because Mr. Ahmad’s PERS pension was considered            
          marital property by the Court of Common Pleas.  Payments to                 
          alternate payees pursuant to a qualified domestic relations order           
          are not subject to the section 72(t) addition to tax.  Sec.                 

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