Beverly Johnson - Page 5

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               Section 72(t)(1) generally imposes a 10-percent additional             
          tax on premature distributions from “a qualified retirement plan            
          (as defined in section 4974(c))”, unless the distributions come             
          within one of the statutory exceptions under section 72(t)(2).              
               The legislative purpose underlying the section 72(t) tax is            
          that “‘premature distributions from IRAs frustrate the intention            
          of saving for retirement, and section 72(t) discourages this from           
          happening.’”  Arnold v. Commissioner, 111 T.C. 250, 255 (1998)              
          (quoting Dwyer v. Commissioner, 106 T.C. 337, 340 (1996)); S.               
          Rept. 93-383, at 134 (1974), 1974-3 C.B. (Supp.) 80, 213.                   
               Section 72(t)(2)(A)(iii) provides an exception for                     
          distributions “attributable to the employee’s being disabled                
          within the meaning of subsection (m)(7)”.  Section 72(m)(7)                 
               (7) Meaning of disabled.-- For purposes of this                        
               section, an individual shall be considered to be                       
               disabled if he is unable to engage in any substantial                  
               gainful activity by reason of any medically                            
               determinable physical or mental impairment which can be                
               expected to result in death or to be of long-continued                 
               and indefinite duration.  An individual shall not be                   
               considered to be disabled unless he furnishes proof of                 
               the existence thereof in such form and manner as the                   
               Secretary may require.                                                 
               The determination of whether a taxpayer is disabled is made            
          with reference to all the facts of the case.  Sec. 1.72-                    
          17A(f)(2), Income Tax Regs.  The regulations also set forth                 
          general considerations upon which a determination of disability             

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