Henry Uscinski and Jacqueline Uscinski - Page 6

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               A 10-percent additional tax is imposed upon distributions              
          from a “qualified retirement plan”, unless the distribution                 
          satisfies one of a number of exceptions enumerated under section            
          72(t)(2).  Sec. 72(t)(1) and (2).  A qualified retirement plan              
          includes a section 401(k) plan.  Secs. 72(t)(1), 401(a), (k)(1),            
          4974(c)(1).  The distribution was made from a qualified                     
          retirement plan because petitioners acknowledge that the                    
          distribution was made from a section 401(k) plan.  In addition,             
          Mr. Uscinski’s answers to interrogatories concede that the                  
          distribution does not fall within any of the enumerated                     
          exceptions to the imposition of the 10-percent additional tax,              
          with the exception of his allegation that the early distribution            
          was for education expenses.  Accordingly, we limit our discussion           
          to whether the distribution could satisfy the higher education              
          expense exception.                                                          
               The 10-percent additional tax imposed on early distributions           
          from qualified retirement plans does not apply to distributions             
          from individual retirement plans for higher education expenses.             
          Sec. 72(t)(2)(E).  An individual retirement plan is defined as an           
          individual retirement account or individual retirement annuity              
          (collectively IRAs) described in section 408(a) or (b).  Sec.               
          7701(a)(37).  Section 72(t)(2)(E) was added by the Taxpayer                 
          Relief Act of 1997, Pub. L. 105-34, section 203(a), 111 Stat.               
          788, 809.  The report of the Committee on the Budget refers only            
          to tax-free withdrawals from IRAs for higher education expenses.            




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