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Respondent determined a deficiency in petitioner’s Federal
income tax for 2002 in the amount of $5,361 and the accuracy-
related penalty under section 6662(a) in the amount of $1,072.
The principal issue is whether petitioner is liable for the
10-percent additional tax under section 72(t) for an early
distribution from a qualified retirement plan, and whether
petitioner is liable for the penalty under section 6662(a).2
Some of the facts were stipulated and are incorporated
herein. At the time the petition was filed, petitioner resided
in Melbourne, Florida.
Petitioner was an employee of Bell Atlantic for 10 years.
Bell Atlantic, either by merger or other type of corporate
reorganization, became known as Verizon or Verizon
Communications. During the year 1999, petitioner retired. At
the time of his retirement, petitioner was 56 years old.
As an employee, petitioner was a participant in two pension
plans of his employer. One plan was described as a “Direct
Savings Account Plan”, and the other plan was described as a
“401(k) plan”. Both plans were qualified plans under section
401. The issue in this case arises from a withdrawal by
2The notice of deficiency also included an adjustment of $62
in unreported interest income. Petitioner conceded that issue at
trial. Petitioner also reported nonemployee compensation of
$2,354, which he reported as other income on his income tax
return. In the notice of deficiency, respondent determined that
this income was subject to self-employment tax. Petitioner did
not challenge that determination.
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Last modified: May 25, 2011