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long it would take to obtain a distribution from his retirement
account. PSRS advised petitioner that it would take about 60
days. Petitioner planned to use the distribution to live on
during 2005.
Petitioner requested a distribution from his retirement
account in mid-November 2004. The distribution did not take as
long to process as anticipated. Petitioner received $62,467.58
from his retirement account in December 2004. PSRS withheld
$12,493.52 in Federal tax from the distribution. Petitioner was
53 when he received the distribution.
The retirement plan issued petitioner a Form 1099-R,
Distributions From Pensions, Annuities, Retirement or Profit-
Sharing Plans, IRAs, Insurance Contracts, etc., reporting it paid
petitioner the $62,467.58 from his retirement account in 2004 and
that it withheld $12,493.52 in Federal tax from the distribution.
Petitioner did not report the distribution on his tax return for
2004, however. Petitioner crossed out the “taxable amount” on
the line on the return for reporting pension and annuity income,
and wrote in “mistake” and “next year.” Petitioner also attached
a statement to his return for 2004 explaining that he did not
want the funds from his retirement plan in 2004 and asserting
that he would not pay taxes on the funds for 2004. Petitioner
reported the distribution from the retirement account as wages on
his return for 2005.
Respondent issued a deficiency notice for 2004 in which
respondent determined that petitioner should have reported the
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