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exposure to known liver toxins.”
In 2002, IT went bankrupt and petitioner's employment was
terminated. After IT went into bankruptcy, petitioner could not
find employment similar to that which he had. He attended North
Georgia College and State University, became qualified as a high
school teacher, and became a teacher in August 2003.
During 2001, petitioner withdrew $56,250 from a section
401(k) retirement plan (the distribution). At that time he had
not reached age 59-1/2. Petitioners reported the distribution on
their joint 2001 Federal income tax return, but did not report
any additional tax under section 72(t). Respondent determined
that the 10-percent additional tax was due.
Discussion
Section 72(t) provides:
SEC. 72(t). 10-Percent Additional Tax on Early
Distributions from Qualified Retirement Plans.--
(1) Imposition of additional tax.--If any
taxpayer receives any amount from a qualified
retirement plan * * * the taxpayer’s tax under this
chapter for the taxable year in which such amount is
received shall be increased by an amount equal to 10
percent of the portion of such amount which is
includible in gross income.
(2) Subsection not to apply to certain
distributions.--Except as provided in paragraphs (3)
and (4), paragraph (1) shall not apply to any of the
following distributions:
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Last modified: May 25, 2011