Linda L. Domanico and Anthony M. Domanico - Page 3

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               Respondent determined a deficiency in petitioners’ Federal             
          income tax for the taxable year 2001 of $4,046.  The deficiency             
          is attributable solely to the 10-percent additional tax under               
          section 72(t) on an early distribution from a qualified                     
          retirement plan.                                                            
               After petitioners’ partial concession concerning the amount            
          of the deficiency in dispute,2 the sole issue for decision is               
          whether petitioners are liable under section 72(t) for the 10-              
          percent additional tax on an early distribution from petitioner             
          Linda L. Domanico’s section 401(k) qualified retirement plan                
          (401(k) plan).  We hold that they are.                                      
               Some of the facts have been stipulated, and they are so                
          found.  We incorporate by reference the parties’ stipulation of             
          facts and accompanying exhibits.                                            
               At the time that the petition was filed, petitioners resided           
          in Lindenhurst, New York.                                                   
               From 1978 to 1996, petitioner Linda L. Domanico (Mrs.                  
          Domanico) worked as a flight attendant for Trans World Airlines,            

               2  On or about Dec. 11, 2003, petitioners paid to respondent           
          $931 in respect of the $4,046 deficiency representing the 10-               
          percent additional tax under sec. 72(t) on $8,560 of petitioner             
          Linda L. Domanico’s 401(k) plan distribution, which portion                 
          petitioners conceded was not used for higher education expenses,            
          plus interest thereon.  However, as discussed infra in the text,            
          the distribution of $40,457 less her education expenses of                  
          $32,147 equals $8,310.  This discrepancy is not explained in the            

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