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petitioner is 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. Petitioner’s legal residence at the time the petition
was filed was Casco Township, Michigan.
Petitioner was employed as a schoolteacher by the Fraser
Public School System (the school system). The school system
maintained a pension plan for its employees (including
petitioner), which qualified, as stipulated by the parties, as a
section 403(b) plan.
During the year 2002, petitioner, as an employee and a
participant in the pension plan, withdrew $67,552.64 from the
plan, the proceeds of which were to fund her daughter’s higher
education expenses.
On her Federal income tax return for 2002, petitioner
reported the entire amount of the pension plan withdrawal as
income; however, petitioner failed to report a liability for the
10-percent section 72(t) additional tax for an early withdrawal
from a qualified pension plan. In the administrative review or
audit of petitioner’s tax return, the IRS agreed that $37,112.64
of the $67,552.64 withdrawn from the pension plan was
appropriately expended for the qualified higher education
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Last modified: May 25, 2011