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by Vestin Mortgage.4 The account was a “transfer on death”
account with a listed beneficiary.
On August 16, 2004, respondent assessed the underpayment
from petitioner’s 2002 tax return, as well as additions to tax
for late filing and late payment, and statutory interest.
On September 17, 2005, respondent issued to petitioner a
Final Notice of Intent to Levy and Notice of Your Right to a
Hearing with respect to petitioner’s Federal income tax liability
for the taxable year 2002. Petitioner timely requested an
administrative appeals hearing.
Respondent mailed to petitioner a Notice of Determination
Concerning Collection Action(s) Under Section 6320 and/or 6330
dated March 7, 2006, determining that he was liable for both the
regular tax and the additional early withdrawal tax on the
$45,000, as well as the additions to tax and interest previously
assessed. Petitioner timely filed a petition with this Court.
At trial, petitioner conceded that $20,000 of his Individual
Retirement Account (IRA) distribution was properly includable in
his income and subject to the additional 10-percent tax imposed
by section 72(t). He maintained, however, that $25,000 of the
4 Petitioner heard about Vestin Mortgage from a friend who
recommended the investment company because “they are on TV all
the time.” According to petitioner’s testimony, it was only
after he gave Vestin Mortgage his money that he discovered the
company was under investigation by the Securities and Exchange
Commission.
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Last modified: November 10, 2007