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of age 55; (6) as dividends paid with respect to corporate stock
described in section 404(k); (7) to an employee for medical care;
or (8) to an alternate payee pursuant to a qualified domestic
relations order.
Petitioner acknowledged at trial that he used the proceeds
of the distribution to pay personal expenses and a substantial
amount was used to pay expenses of his fiancee, who was in a
financial bind.
The Court agrees with respondent that petitioner’s use of
the distribution proceeds in this fashion does not exempt the
distribution from the additional tax under section 72(t).
However, section 72(t)(2)(A)(v) provides that the section 72(t)
additional tax does not apply to distributions made to an
employee after separation from service after attainment of age
55. Petitioner testified he was separated from service at age
56. Respondent did not challenge that assertion. On these
facts, the Court sustains petitioner under section
72(t)(2)(A)(v).
Petitioner conceded the other adjustment noted earlier
relating to two items of unreported income. Petitioner presented
no evidence addressing the section 6662 penalty as relates to
these two items. Respondent, therefore, is sustained on the
penalty.
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