-2-
Additions to Tax/Penalties
Year Deficiency Sec. 6651(a)(1) Sec. 6662(a)
1999 $94,699.32 $23,674.83 $12,793.13
2000 1,000.00 None None
Unless stated otherwise, all section references in this opinion
are to the Internal Revenue Code as in effect during the years in
issue.
The issues for decision are: (1) Whether the distributions
received by petitioners during 1999 and 2000 from petitioner
Ramzy M. Kopty’s individual retirement account (IRA) in the
aggregate amounts of $331,500 and $10,000, respectively, are
includable in petitioners’ gross income, pursuant to section
408(d); (2) whether petitioners are subject to the 10-percent
additional tax on early distributions imposed by section 72(t) on
the distributions received by petitioners from Mr. Kopty’s IRA
during 1999 and 2000; (3) whether petitioners are liable for the
addition to tax of $23,674.83 determined by respondent under
section 6651(a)(1) for failure to file a timely return for 1999;
and (4) whether petitioners are subject to the accuracy-related
penalty of $12,793.13 determined by respondent under section
6662(a) with respect to their 1999 return.
FINDINGS OF FACT
Petitioners are husband and wife. They resided in Waterloo,
Belgium, at the time they filed their petition in this case. In
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