                  T.C. Summary Opinion 2001-165



                     UNITED STATES TAX COURT



         WILLIAM L. AND AUDREY K. TRACE, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket No. 11657-00S.                  Filed October 16, 2001.


     William L. Trace, pro se.

     Dustin M. Starbuck, for respondent.


     POWELL, Special Trial Judge:     This case was heard pursuant

to the provisions of section 7463.1    The decision to be entered

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

be cited as authority.

     Respondent determined a deficiency of $3,150 in petitioners’

1998 Federal income tax.   The issue is whether petitioners are

entitled to deduct the 10-percent additional tax on early


1
     Subsequent section references are to the Internal Revenue
Code in effect for the year in issue.
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distributions paid pursuant to section 72(t).   Petitioners

resided in Milford, Virginia, at the time they filed their

petition.

     The facts are not in dispute and may be summarized as

follows.    Petitioner William L. Trace received distributions in

the amount of $114,500 from a qualified retirement plan to which

the additional tax ($11,450) under section 72(t) applied.

Petitioners do not dispute that the additional tax applied to the

distributions or the amount of the additional tax.    Petitioners

contend, however, that they are entitled to a deduction on their

1998 Federal income tax return in the amount of the additional

tax under section 164.

     The tax for which the deduction here is claimed arises under

section 72(t).   Section 72(t) provides that if a taxpayer

receives a distribution from a qualified retirement plan “the

taxpayer’s tax under this chapter * * * shall be increased by an

amount equal to 10 percent of the portion of such amount which is

includible in gross income.”   The chapter referred to in section

72(t) pertains to income taxes.

     Section 164(a) provides, in pertinent part:

          SEC. 164(a). General Rule.--Except as otherwise
     provided in this section, the following taxes shall be
     allowed as a deduction for the taxable year within which
     paid or accrued:

                 (1) State and local, and foreign, real property
            taxes.
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                 (2) State and local personal property taxes.

               (3) State and local, and foreign, income, war
          profits, and excess profits taxes.

                 (4) The GST tax imposed on income distributions.

                 (5) The environmental tax imposed by section 59A.

     In addition, there shall be allowed as a deduction State and
     local, and foreign, taxes not described in the preceding
     sentence which are paid or accrued within the taxable year
     in carrying on a trade or business or an activity described
     in section 212 (relating to expenses for production of
     income). * * *

     Section 164(a) does not mention Federal income taxes.      On

the other hand, section 275(a)(1) provides, inter alia, that no

deduction shall be allowed for Federal income taxes.   It is,

therefore, clear that petitioners may not deduct the tax imposed

by section 72(t).    See Escofil v. Commissioner, 464 F.2d 358 (3d

Cir. 1972), affg. T.C. Memo. 1971-131; White v. Commissioner,

T.C. Memo. 1979-6.

     Petitioners claim that the instruction booklet (“1040 Forms

and Instructions”) they used in the preparation of their return

is misleading.   Putting aside the point that the statute is clear

and is controlling, the instructions to which petitioners refer

clearly provides that a taxpayer may not deduct Federal income

taxes.
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    Reviewed and adopted as the report of the Small Tax Case

Division.

                                          Decision will be entered

                                     for respondent.
