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stopped working for the University, her PERS account had a
balance of $34,665.66, all of which represented her
contributions.
Petitioner desired to use the balance of her PERS account to
pay for her college education and was told that she could receive
that balance approximately 3 months after requesting it. She
knew at the time that her withdrawal of those funds would subject
the funds to an additional tax under section 72(t)(1) unless she
used the funds to pay for her education. On August 19, 1999, she
established an IRA and asked the trustee of PERS to transfer the
$34,665.66 to the IRA. PERS replied through a letter dated
November 9, 1999, that legislation was pending in the Ohio
General Assembly that would retroactively add interest to her
PERS account. The letter stated that the legislation, S. 144,
123d Gen. Assembly Reg. Sess. (Oh. 2000) (S. 144), had passed the
Senate and had been forwarded to the House. The letter advised
petitioner that she may wish to defer her withdrawal request
until after the legislation was effective. Petitioner deferred
her request for the transfer of funds.
From at or around the end of August 1999 through May 2001,
petitioner attended the Art Academy of Cincinnati and, in the
summer of 2000, the University. She graduated from the former
school in May 2001 with a bachelor of fine arts. During 1999,
2000, and 2001, she incurred $7,250, $17,097, and $7,937 of
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