                   T.C. Summary Opinion 2001-1



                     UNITED STATES TAX COURT



                 LESLIE C. BOOTH, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10359-99S.             Filed January 3, 2001.



     Leslie C. Booth, pro se.

     Julie L. Payne, for respondent.



     GOLDBERG, Special Trial Judge:    This case was heard pursuant

to the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.    The decision to be

entered is not reviewable by any other court, and this opinion

should not be cited as authority.   Unless otherwise indicated,

subsequent section references are to the Internal Revenue Code in

effect for the year in issue.
                                 2

     Respondent determined a deficiency in petitioner’s 1996

Federal income tax in the amount of $1,997.1

     The sole issue for decision is whether petitioner is liable

for a 10-percent additional tax under section 72(t)(1) on a

$19,971.19 distribution from two individual retirement accounts

(IRA’s).

     Some of the facts have been stipulated and are so found.

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.   At the time the petition

was filed, petitioner resided in Seattle, Washington.

     In 1995, petitioner and Patricia M.L. Booth (Ms. Booth) were

married.   In 1996, petitioner was employed as a laborer in a

longshoring yard with Northland Services, Inc.    Petitioner

individually owned two IRA accounts with Aetna Life Insurance &

Annuity Co. (Aetna) prior to his marriage with Ms. Booth.

Petitioner and Ms. Booth were divorced in 1998.

     During 1996, petitioner testified that he withdrew the full

amount of both IRA accounts at “my wife’s order” so that Ms.




     1
          The notice of deficiency was addressed to Leslie C. and
Patricia M.L. Booth (Ms. Booth). However, Ms. Booth is not a
party to this action.
                                 3

Booth could remodel her home.2   Petitioner does not have a record

of where the funds were transferred upon withdrawal.

     Petitioner did not roll over the IRA amounts into another

qualified employee retirement plan or individual retirement plan.

He received two Forms 1099-R, Distributions From Pensions,

Annuities, Retirement or Profit-Sharing Plans, IRA’s, Insurance

Contracts, Etc., for the year 1996 reflecting the withdrawals

from the IRA’s.   The amounts withdrawn were reported on

petitioner’s and Ms. Booth’s joint Federal income tax return.

Although the amount of the distribution was reported on the

return, the 10-percent penalty for early withdrawal was not

reported.   Petitioner, who was born on November 15, 1956, was 40

years of age in 1996 when the withdrawals were made.

     In a notice of deficiency, respondent determined a

deficiency in the amount of $1,997.   This amount represented a

10-percent additional tax on IRA distributions pursuant to

section 72.

     Under section 408(d)(1), a distribution from an IRA is

taxable to the distributee in the year of distribution in the

manner provided under section 72.    Section 408(d)(3) provides an

exception to the general rule for certain “rollovers” by the



     2
          The family home was Ms. Booth’s separate property
before marriage. Upon marriage, petitioner became a joint owner
of the home, and then upon divorce the home was awarded to Ms.
Booth.
                                4

distributee; namely, where a distribution is paid to the

distributee, and the distributee transfers the entire amount of

the distribution to an IRA or an individual retirement annuity

within 60 days of receipt.

     Section 72(t)(1) provides for a 10-percent additional tax on

distributions from qualified retirement plans.   Section 72(t)(2)

excludes qualified retirement plan distributions from the 10-

percent additional tax if the distributions are: (1) Made on or

after the date on which the employee attains the age of 59-1/2;

(2) made to a beneficiary (or to the estate of the employee) on

or after the death of the employee; (3) attributable to the

employee's being disabled within the meaning of section 72(m)(7);

(4) part of a series of substantially equal periodic payments

(not less frequently than annually) made for the life (or life

expectancy) of the employee or joint lives (or joint life

expectancies) of such employee and his designated beneficiary;

(5) made to an employee after separation from service after

attainment of age 55;3 or (6) dividends paid with respect to

stock of a corporation which are described in section 404(k).    A

limited exclusion is also available for distributions made to an

employee for medical care expenses.   See sec. 72(t)(2)(B).




     3
          This provision, codified at sec. 72(t)(2)(A)(v), is not
applicable to premature IRA distributions. See sec. 72(t)(3)(A).
                                 5

     Petitioner’s IRA’s were qualified retirement plans.

Petitioner did not roll over his IRA distributions and does not

claim to fit within any of the statutory exceptions of section

72(t)(2).   Petitioner testified that he was made aware at

meetings provided by Aetna regarding his IRA accounts that there

may be a tax because “you always have to pay taxes on something.”

Petitioner would have us consider his actions in light of his

recent legal difficulties in the Washington State courts.

     Petitioner has not contested on any specific ground

respondent’s determination that he is liable for a 10-percent

additional tax on his 1996 IRA distributions.   Since petitioner

fails to qualify for any of the statutory exceptions under

section 72(t)(2), we hold that petitioner is liable for the

10-percent additional tax on distributions from a qualified

retirement plan for 1996 as provided in section 72(t)(1).

Respondent is sustained on this issue.

     Reviewed and adopted as the report of the Small Tax Case

Division.

                                          Decision will be entered

                                     for respondent.
