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retire because they have “sufficient money to take * * * care of
[them]selves”.
Deductions, which are strictly construed, are a matter of
legislative grace, and the burden of clearly showing the right to
the claimed deduction is on the taxpayer. INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992). We are bound by the
Internal Revenue Code, and it is within the province of the
legislature to decide the circumstances of inclusion, deductions,
and exceptions. See Wilkins v. Commissioner, 120 T.C. 109, 112
(2003). The 10-percent additional tax applies to early
distributions unless otherwise specifically exempted. Roundy v.
Commissioner, 122 F.3d 835, 837 (9th Cir. 1997), affg. T.C. Memo.
1995-298.
Accordingly, respondent’s determination that petitioners are
liable for the 10-percent additional tax is sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered for
respondent.
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Last modified: May 25, 2011