- 11 -
the portion of such amount which is includable in gross income.”
Section 72(t)(2) further provides:
Paragraph [72(t)(1) shall not apply to any of the following
distributions:
(A) * * * Distributions which are--
(iv) part of a series of substantially equal
periodic payments * * * or
* * * * * * *
(vii) made on account of a levy under section
6331 on the qualified retirement plan.
Section 72(t)(4) provides:
(A) In general. If–-
(i) paragraph (1) does not apply to a
distribution by reason of paragraph (2)(A)(iv),
and
(ii) the series of payments under such
paragraph are subsequently modified (other than by
reason of death or disability)-
(I) before the close of the 5-year
period beginning with the date of the first
payment and after the employee attains age
59-1/2, or
(II) before the employee attains age 59-
1/2,
the taxpayer’s tax for the 1st taxable year in which
such modification occurs shall be increased by an
amount, determined under regulation, equal to the tax
which (but for paragraph (2)(A)(iv)) would have been
imposed, plus interest for the deferral period.
Petitioner’s argument is premised on his belief that section
72(t)(4)(A), which applies the aforementioned recapture tax when
a taxpayer modifies an existing series of substantially equal
payments, supersedes the exception to the 10-percent additional
tax provided in section 72(t)(2)(A)(vii), in cases where the
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: March 27, 2008