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Petitioner timely filed a Form 1040, U.S. Individual Income
Tax Return, for 2001. Chase Manhattan Bank issued to petitioner
a Form 1099-R, Distributions From Pensions, Annuities, Retirement
or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., showing
a gross and taxable distribution from his 401(k) plan for 2001 of
$30,368.86. Petitioner included the $30,368.86 distribution as
income on his return but did not report the additional tax for an
early distribution under section 72(t). In the notice of
deficiency, respondent determined that petitioner was liable for
a 10-percent additional tax on the early 401(k) plan distribution
pursuant to section 72(t).
Discussion
Taxpayers generally bear the burden of proving the
Commissioner’s determinations are incorrect. See Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). The burden as to a
factual issue relevant to the liability for tax may shift to the
Commissioner if the taxpayer introduces credible evidence and
satisfies the requirement to substantiate items. Sec.
7491(a)(2)(A). The facts are not in dispute in this case, and
section 7491(a) has no bearing in this case.
Section 72(t)(1) imposes an additional tax on an early
distribution from qualified retirement plans equal to 10 percent
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