Linda L. Domanico and Anthony M. Domanico - Page 9

                                        - 8 -                                         
          7701(a)(37).  Retirement plans qualified under section 401(a) and           
          (k), however, are not included in the definition of “individual             
          retirement plan” under section 7701(a)(37).                                 
               Clearly, Congress intended this exception to apply only to             
          distributions from “individual retirement plans”; i.e., IRAs, and           
          not to all qualified retirement plans.  See secs. 4974(c)(4) and            
          (5) and 7701(a)(37); Taxpayer Relief Act of 1997, Pub. L. 105-34,           
          sec. 203(a), 111 Stat. 809.  This is evident in the report of the           
          Committee on the Budget, which provides:                                    
                    Penalty free IRA withdrawals for education                        
               expenses--The bill provides that individuals may make                  
               penalty-free withdrawals from their IRAs to pay for the                
               undergraduate and graduate higher education expenses of                
               themselves, their spouses, their children and                          
               grandchildren or the children or grandchildren of their                
               spouses.  [Emphasis added.]                                            
          H. Rept. 105-148, at 288-289 (1997), 1997-4 C.B. (Vol. 1) 319,              
          610-611.  The report of the Committee on the Budget specifically            
          provides that only withdrawals from IRAs that are used for higher           
          education expenses will qualify as withdrawals excepted from the            
          10-percent additional tax.  Id.                                             
               In the present case, Mrs. Domanico’s 401(k) plan is a                  
          qualified retirement plan, and distributions therefrom are                  
          subject to the 10-percent additional tax under section 72(t)(1)             
          absent an applicable statutory exception.5  Although Mrs.                   

               5  None of the exceptions under sec. 72(t)(2)(A) (e.g.,                
          distributions (1) made after the employee attains age 59 �, (2)             

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  Next

Last modified: May 25, 2011