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Respondent determined a deficiency of $8,055.90 in
petitioners’ 2004 Federal income tax. The issue we must decide
is whether petitioners are liable for the 10-percent additional
tax for an early distribution from a retirement account under
section 72(t) in 2004.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated by this reference. When the petition was filed,
petitioners resided in West Grove, Pennsylvania.
During 2004, petitioner Anna Warrington (Ms. Warrington)
was employed by Blue Cross/Blue Shield of Delaware as a customer
service representative. Ms. Warrington had worked for Blue
Cross/Blue Shield for 10 years. Apparently due to some problems
involving her daughter, Ms. Warrington began suffering from a
self-characterized “nervous breakdown” in 2004. This breakdown
caused Ms. Warrington to miss work and, often, left her unable to
leave the house. Ms. Warrington’s employment with Blue
Cross/Blue Shield was terminated in May 2004. On June 11, 2004,
MetLife Insurance Co. (MetLife) sent Ms. Warrington a letter
approving her for 1 month of disability benefit payments.
Although Ms. Warrington had seen a psychiatrist in the past
in relation to her problems with her daughter, Ms. Warrington
felt that the psychiatrist’s treatments were unhelpful. At some
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