Richard D. Smart - Page 3

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               Respondent determined a deficiency in petitioner’s Federal             
          income tax for the taxable year 2002 of $11,625.10.  The sole               
          issue for decision is whether petitioner is liable, under section           
          72(t), for the 10-percent additional tax on an early distribution           
          from petitioner’s qualified retirement plan.  We conclude that he           
          is.                                                                         
                                     Background                                       
               Some of the facts have been stipulated, and they are so                
          found.  We incorporate by reference the parties’ stipulation of             
          facts and accompanying exhibits.                                            
               At the time that the petition was filed, petitioner resided            
          in Macomb, Illinois.                                                        
               Petitioner worked for Connor Company for 22 years.  He                 
          participated in the company’s Employees Savings and Profit                  
          Sharing 401(k) Plan (401(k)) and retired in 2002 at the age of              
          54.2                                                                        
               During 2002, petitioner received two distributions from his            
          401(k) account.  One of the distributions comprised just the                
          earnings on the money invested into his 401(k) account;                     
          petitioner rolled over the entire amount, $110,686.68, into an              
          individual retirement account.  This distribution is not at issue           
          in this case.                                                               


               2  There is no dispute that this 401(k) plan is a qualified            
          retirement plan for Federal tax purposes.  See secs. 401(a),                
          (k)(1), 4974(c)(1).                                                         




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