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under section 72(t) on early distributions. See Plotkin v.
Commissioner, supra.
The additional tax under section 72(t) does not apply to
certain distributions from qualified retirement plans. For
example, the additional tax does not apply to distributions that
are made on or after the date on which the employee attains the
age of 59�, that are made to a beneficiary on or after the death
of the employee, that are attributable to the employee’s being
disabled, or that are made to an employee after separation from
service after attainment of age 55. See sec. 72(t)(2).5
Petitioners do not contend that any of the statutory exceptions
apply to their case. Rather, they contend that the additional
tax should not be imposed because they were precluded from making
loan repayments to Mr. White’s 401(k) plan by virtue of the
chapter 13 bankruptcy plan.
The short answer to petitioners’ contention is that there is
no specific exception under section 72(t)(2) that addresses
5 See also sec. 72(t)(2)(E), which excepts from the
additional tax, under sec. 72(t), certain distributions for
higher education expenses. However, the exception does not apply
to distributions from all qualified retirement plans but rather
only to distributions from “individual retirement plans”, i.e.,
individual retirement accounts and individual retirement
annuities (IRAs). See secs. 7701(a)(37), sec. 4974(c)(4) and
(5); see also Taxpayer Relief Act of 1997, Pub. L. 105-34, sec.
203(a), 111 Stat. 788, 809; H. Rept. 105-148 at 288-289 (1997),
1997-4 C.B. (Vol. 1) 319, 610-611. Because the deemed
distribution in this case came from Mr. White’s 401(k) account,
which is not an IRA plan, the exception set forth in sec.
72(t)(2)(E) does not apply.
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Last modified: May 25, 2011