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petitioners are liable for the 10-percent additional tax under
section 72(t) for an early distribution from a qualified
retirement plan.
Some of the facts were stipulated. Those facts and the
accompanying exhibits are so found and are incorporated herein by
reference. Petitioners’ legal residence at the time the petition
was filed was McKinney, Texas.
Stephanie S. Barbee (petitioner) was employed for 7 years by
the Texas Workforce Commission, formerly the Texas Employment
Commission, as an employment interviewer. Her agency dealt with
unemployment insurance benefits. Petitioner, as a State
employee, was a participant in the Employees Retirement System of
Texas.
During 1999, petitioner resigned from her employment. At
the time she left her employment, she was not eligible to draw
retirement benefits from the plan. She was, however, entitled to
make withdrawals from the plan. Petitioner husband Richard L.
Barbee, during the year at issue, was a full-time student at the
University of North Texas at Denton, Texas. In order to defray
Mr. Barbee’s educational expenses, petitioner withdrew $13,817.18
during 2000 from the Employees Retirement System of Texas, and
used those moneys exclusively for payment of Mr. Barbee’s higher
education expenses. On their Federal income tax return for 2000,
pursuant to a Form 1099-R, Distributions From Pensions,
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Last modified: May 25, 2011