- 4 -
Accordingly, we need not decide whether section 7491(a) applies
in this case.1
Section 72(t)(1) imposes an additional tax on an early
distribution from a qualified retirement plan equal to 10 percent
of the portion of the amount which is includable in gross income.
A qualified retirement plan includes a section 401(k) plan. See
secs. 401(a), (k)(1), 4974(c)(1). Petitioners do not dispute
that the unpaid balance of the loan from the section 401(k) plan
was an early distribution which was includable in gross income.
The 10-percent additional tax does not apply to certain
distributions, including distributions: (1) To an employee age
59-1/2 or older; (2) on account of the employee’s disability; (3)
as part of a series of substantially equal periodic payments made
for life; (4) to an employee after separation from service after
attainment of age 55; (5) to an employee for medical care; or (6)
to an alternate payee pursuant to a qualified domestic relations
order. Sec. 72(t)(2).
Petitioners do not argue that they satisfy any of the
enumerated exceptions under section 72(t)(2). Instead,
petitioners contend that the additional tax should not apply
1 Pursuant to sec. 7491(c), the Commissioner bears the
burden of production with respect to any penalty, addition to
tax, or additional amount. Even if the $2,338 additional tax
under sec. 72(t) is an “additional amount” for which respondent
bears the burden of production, respondent has met such burden by
showing that petitioner received the distribution when he was 53
years old. See Milner v. Commissioner, T.C. Memo. 2004-111 n.2.
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