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Respondent determined a $3,720 additional tax under section
72(t)(1) relating to petitioner’s Federal income tax for 2004.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for 2004.
The sole issue for decision is whether under section 72(t)
petitioner owes a 10-percent additional tax on an early
distribution from his individual retirement account (IRA).
Background
Some of the facts have been stipulated and are so found.
At the time the petition was filed, petitioner resided in
North Carolina.
Before 1998, petitioner worked and contributed to an IRA.
During 1998 through 2004, petitioner was employed at various
temporary jobs and borrowed money from family members to pay
personal expenses.
In 2004, petitioner received as his only source of taxable
income a $37,200 early distribution from his IRA. At the time of
the distribution, petitioner had not attained age 59-1/2, and
Federal income taxes of $7,440 were withheld from the
distribution to petitioner.
On his timely filed 2004 individual Federal income tax
return, petitioner reported the entire $37,200 IRA distribution
as taxable income, and he reported a $4,056 Federal income tax
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Last modified: March 27, 2008