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Administration (distribution) in 2003. At the time, petitioner
was 50 years old.
Petitioner filed a Form 1040, U.S. Individual Income Tax
Return, for 2003, on which he included the distribution as
income. Petitioner claimed on line 2 of Form 5329, Additional
Taxes on Qualified Plans (including IRAs) and Other Tax-Favored
Accounts, that he was excepted from the additional tax on early
distributions, because the distribution was due to total and
permanent disability.
On December 13, 2004, respondent issued to petitioner a
statutory notice of deficiency for 2003. Respondent determined
that petitioner is liable for an additional tax on the
distribution under section 72(t), because his premature
distribution did not meet any of the exceptions enumerated under
section 72(t)(2).
Discussion
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).
One of the exceptions listed is a distribution attributable to
the employee’s being disabled within the meaning of section
72(m)(7). Sec. 72(t)(2)(A)(iii).
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