Alex B. Rhodes, Jr. - Page 4




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               Petitioner did not file a Federal income tax return for                
          2001.  Using third-party-payor information, respondent determined           
          that in 2001 petitioner received wage income of $99,949 from MBNA           
          and capital gain income of $73 from AXP.  Petitioner failed to              
          make estimated tax payments, other than tax of $43 withheld by              
          MBNA.                                                                       
               Petitioner did not file a Federal income tax return for                
          2002.  Using third-party-payor information, respondent determined           
          that in 2002 petitioner received wage income of $99,771 from MBNA           
          Technology, Inc. (MBNA Technology), capital gain income of $456             
          from MBNA Corp., and a taxable distribution of $4,449 from MBNA             
          Corp. 401K Plus Savings Plan (MBNA Corp. 401K).  Petitioner                 
          failed to make estimated tax payments, other than tax withheld by           
          MBNA Corp. 401K of $615.  Respondent determined petitioner was              
          liable for the additional tax of 10 percent on the distribution             
          from MBNA Corp. 401K pursuant to section 72(t) because it was an            
          early distribution from a qualified retirement plan.                        
               Respondent received petitioner’s Form 1040, U.S. Individual            
          Income Tax Return, for 2003 (2003 return) on February 3, 2004.              
          The 2003 return showed zeros on lines 7 through 22, zero adjusted           
          gross income (line 33), zeros on lines 35 through 43, zeros on              
          lines 53 through 59, zero total tax, Federal income tax                     
          withholding of $569, and a claimed refund of $569.  Under Rule              








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