Wayne Smith - Page 16


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          however, the taxpayer has a right to access the funds, and does             
          so in an effort to alleviate his tax liability, or does so in a             
          manner (such as in Arnold v. Commissioner, supra) that modifies             
          the series of substantially equal payments under section                    
          72(t)(4)(A) for his personal gain, then that voluntary action               
          should trigger the recapture penalty under section 74(t)(4)(A).             
               Based on the foregoing, we reject petitioner’s argument that           
          the recapture penalty under section 72(t)(4)(A) supersedes the              
          levy exception provision under section 72(t)(2)(A)(vii).  In                
          doing so, we conclude that respondent’s Appeals Office did not              
          act in an arbitrary or capricious manner in disregarding                    
          petitioner’s position that a levy upon his IRA account would                
          result in not only a significant withdrawal from his account, but           
          an unduly and overly intrusive depletion of most of the account             
          as a result of the application of the recapture tax.                        
               As to petitioner’s argument that respondent’s Appeals Office           
          did not consider petitioner’s position that the proposed levy is            
          unfair in the light of his inability to work and medical                    
          conditions, we are unpersuaded that any issue of fact exists.               
          Petitioner presented no evidence at the time of the hearing that            
          he was unable to work.  He merely stated that due to a tight job            
          market in the telecommunications industry he was unable to find             
          “worthwhile” work.  Although petitioner did include mention in              
          his Explanation (attached to the original OIC) that he had                  
          undergone “two angioplasty procedures”, he offered no additional            







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