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petitioner of $50,545.27 from the Direct Savings Account Plan
during the year at issue, 2002. Petitioner included that amount
as income on his 2002 Federal income tax return. Petitioner,
however, did not include a computation or payment of the
additional tax under section 72(t) for an early distribution from
a qualified retirement plan. In the notice of deficiency,
respondent determined that the distribution was subject to the
additional tax under section 72(t).
Section 72(t) imposes a 10-percent additional tax on early
distributions from a qualified retirement plan. Paragraph (1)
provides in relevant part:
(1) Imposition of additional tax.–-If any taxpayer
receives any amount from a qualified retirement plan (as
defined in section 4974(c)), the taxpayer’s tax under this
chapter for the taxable year in which such amount is
received shall be increased by an amount equal to 10 percent
of the portion of such amount which is includable in gross
income.
The 10-percent additional tax, however, does not apply to
certain distributions. Section 72(t)(2) excepts distributions
from the additional tax if the distributions are made: (1) To an
employee age 59-1/2 or older; (2) to a beneficiary (or to the
estate of the employee) on or after the death of the employee;
(3) on account of the employee’s disability; (4) as part of a
series of substantially equal periodic payments made for life;
(5) to an employee after separation from service after attainment
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Last modified: May 25, 2011