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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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Last modified: May 25, 2011