Steven Rudolph Kaldi - Page 11

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          contribution when there has been substantial compliance with--              
          and the fulfillment of--the remaining requirements of the                   
          statute.  See, e.g., Wood v. Commissioner, 93 T.C. 114 (1989)               
          (IRA trustee’s error did not preclude rollover treatment because            
          taxpayer had substantially complied with statutory requirements).           
          But such treatment is not common, and the facts here do not                 
          warrant or support a recharacterization.  See Schoof v.                     
          Commissioner, supra (nonqualification of IRA trustee was                    
          fundamental defect requiring inclusion of failed rollover into              
          gross income); Crow v. Commissioner, supra (bank’s                          
          mischaracterization of transaction combined with timing error was           
          fatal to taxpayer’s argument that the funds should be treated as            
          a rollover).                                                                
               In the instant case, petitioner has not demonstrated that he           
          substantially complied with the rollover provisions outlined in             
          the statute, nor has he provided us with persusive evidence in              
          support of his claim that his intent was to open an IRA, rather             
          than a regular investment account, with Vestin Mortgage.                    
               Accordingly, the Court finds that petitioner did not roll              
          over the $25,000 into another qualified retirement plan, and the            
          amount is subject to the section 72(t) additional tax.                      
          C.  Additions to Tax                                                        
               Respondent bears the burden of production with respect to              
          the additions to tax.  See sec. 7491(c); see also, e.g., Swain v.           

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Last modified: November 10, 2007