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a decision from an administrative law judge, and that decision
was subsequently affirmed by the California Unemployment
Insurance Appeals Board.
At the end of 2003, petitioner received a lump-sum
distribution of $48,994 from her Verizon Pension Plan
(distribution). At the time, petitioner was 52 years old.
On March 26, 2004, petitioner electronically filed a Form
1040, U.S. Individual Income Tax Return, for 2003. The
distribution was reported as income on the return.
Respondent subsequently issued to petitioner a statutory
notice of deficiency for 2003. Respondent determined that
petitioner is liable for a 10-percent additional tax on the
distribution under section 72(t), because she received the
distribution prematurely.
In her petition, petitioner contended that she is not liable
for the 10-percent additional tax on early distribution, because
she used the distribution to pay her college education expenses.
Petitioner later conceded at trial that she was not entitled to
the higher education expense exception to avoid the 10-percent
additional tax. Petitioner instead asserted, for the first time,
that she withdrew the distribution on account of her disability.
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