                  T.C. Summary Opinion 2002-30



                     UNITED STATES TAX COURT



                GREGORY SCOTT WEST, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 2784-00S.             Filed April 1, 2002.



     Gregory Scott West, pro se.

     Rachael J. Zepeda, 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 1997

Federal income tax in the amount of $3,886.

     The sole issue for decision is whether petitioner is liable

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

$38,855 distribution from an individual retirement account (IRA).

     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 Phoenix, Arizona.

     In 1995, petitioner was employed as a manager at Alamo

Rental Car in Nashville, Tennessee.     Petitioner worked for Alamo

for 12 years prior to March 1995, when he resigned due to failing

health.   At that time, petitioner moved back to Phoenix, Arizona,

to be near his family.   He did not consult with a medical doctor.

     Although petitioner’s illness was not confirmed until 1998,

he was unable to work after March of 1995 as the symptoms of his

illness increased.   In 1998, petitioner confirmed, through an

anonymous testing facility, that he has the human

immunodeficiency virus (HIV) which has developed into the

acquired immunodeficiency syndrome, or AIDS.    Petitioner

testified that he had symptoms in 1995, “and I knew what the

problem was.”   Petitioner also stated that “with HIV, you cannot

start the--the longer you can wait to start medication the

better, because you’re--the virus builds up resistance to the

medication.”    Petitioner was hospitalized in 1999 and has been on
                                - 3 -

medical treatment since then.

     Petitioner testified that he did not seek medical attention

during 1996 through 1998 because he was attempting to secure

employment on a part-time basis and health insurance with no

“annual caps”.   He further testified that “unfortunately, if you

keep it anonymous, you have greater chances of getting

employment, and you know, insurance.”   Petitioner began working

for American Express in mid-1998.   Petitioner works on a part-

time basis, approximately 32 hours per week.   American Express

offers health insurance with no “annual caps” and a salary

continuance program under the Family and Medical Leave Act of

1993, Pub. L. 103-3, 107 Stat. 6.   Petitioner testified that had

he found a company that would have provided the insurance he was

seeking and the part-time schedule, he would have been able to

work in 1997.

     Prior to the year in issue petitioner individually owned an

IRA account.    During 1997, petitioner withdrew $38,855 from his

IRA account.    Petitioner did not roll over the IRA amounts into

another qualified employee retirement plan or individual

retirement plan.   The amount withdrawn was reported on

petitioner’s 1997 Federal income tax return.   Although the amount

of the distribution was reported on the return, petitioner did

not compute the 10-percent additional tax due for premature

distribution.    Petitioner, who was born on March 7, 1957, was 40
                              - 4 -

years of age in 1997 when the withdrawal was made.

     In a notice of deficiency, respondent determined a

deficiency in the amount of $3,886.   This amount represented a

10-percent additional tax on an early IRA distribution pursuant

to section 72(t).

     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

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;1

(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


     1
          For the purpose of sec. 72(t), the term “employee” also
refers to participants in individual retirement accounts. Sec.
72(t)(5).
                               - 5 -

(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;2 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.    Sec. 72(t)(2)(B).

     The parties do not dispute that petitioner’s IRA was a

qualified retirement plan and that petitioner did not “roll over”

his IRA distribution pursuant to section 408(d)(3).    Therefore,

in order to prevail, petitioner must fall under one of the

exclusions under section 72(t)(2).

     At issue here is the exception pertaining to distributions

attributable to an employee’s being disabled within the meaning

of section 72(m)(7).   Sec. 72(t)(2)(A)(iii).   Accordingly,

petitioner is not liable for the 10-percent additional tax for

early withdrawal if he was “disabled” during 1997.

     Section 72(m)(7) defines the term “disabled” as follows:

          For purposes of this section, an individual
          shall be considered to be disabled if he is
          unable to engage in any substantial gainful
          activity by reason of any medically
          determinable physical or mental impairment
          which can be expected to result in death or


     2
          This provision, codified at sec. 72(t)(2)(A)(v), is not
applicable to premature IRA distributions. Sec. 72(t)(3)(A).
                                 - 6 -

          to be of long-continued and indefinite
          duration. An individual shall not be
          considered to be disabled unless he furnishes
          proof of the existence thereof in such form
          and manner as the Secretary may require.

Because petitioner was not treated for HIV until 1999, he has no

medical records reflecting that he had HIV in 1997.    Petitioner

testified that when he was hospitalized in March 1999 his CD4+ T

cell count and viral load readings indicated that the illness had

progressed from prior years.    Petitioner relies on this inference

to prove that he was HIV positive during 1997.    We note, however,

that petitioner failed to provide any medical records from any

year reflecting his CD4+ T cell or viral load levels.3

     Further, at trial petitioner testified that had he found a

company, like American Express, that offered him a part-time work

schedule and medical insurance with no “annual caps”, then he

would have worked in 1997.     Under the definition of disability

found in section 72(m), petitioner is not deemed disabled if he

was able to “engage in any substantial gainful activity” during

the year in issue.   “Substantial gainful activity” refers to the

activity or a comparable activity in which the individual

customarily engaged prior to the disability.     Sec. 1.72-17(f)(1),

Income Tax Regs.   By petitioner’s own testimony, he was able to


     3
          Because petitioner failed to comply with requirements
to substantiate his illness, he failed to meet the requirements
of sec. 7491(a)(2)(A), as amended, so as to place the burden of
proof on respondent with respect to any factual issue relevant to
ascertaining liability for the tax deficiency in issue.
                               - 7 -

work in 1997 at an activity comparable to the one in which he

customarily engaged, and thus he was not disabled as defined in

section 72(m)(7).   See also Dwyer v. Commissioner, 106 T.C. 337

(1996); Fohrmeister v. Commissioner, T.C. Memo. 1997-159; Brown

v. Commissioner, T.C. Memo. 1996-421.

     Petitioner testified that he contacted the Internal Revenue

Service (IRS) with respect to the 10-percent additional tax and

was informed by an IRS agent that he was not subject to the 10-

percent additional tax.   This Court has previously held that the

authoritative sources of Federal tax law are statutes,

regulations, and judicial case law and not informal IRS sources.

Zimmerman v. Commissioner, 71 T.C. 367, 371 (1978), affd. without

published opinion 614 F.2d 1294 (2d Cir. 1979); Green v.

Commissioner, 59 T.C. 456, 458 (1972).   Additionally, in order to

ensure uniform enforcement of the tax law, the Commissioner must

follow authoritative sources of Federal tax law and may correct

mistakes of law made by IRS agents or employees.   Dixon v. United

States, 381 U.S. 68, 72 (1965); Massaglia v. Commissioner, 286

F.2d 258, 262 (10th Cir. 1961), affg. 33 T.C. 379 (1959).   While

it is unfortunate that petitioner may have received unhelpful or

incorrect tax advice from an IRS employee, that advice does not

have the force and effect of law.

     Although we are very sympathetic to petitioner’s medical

situation, he has failed to show that he was disabled, as defined
                              - 8 -

in section 72(m)(7), during the year in issue.    Since petitioner

fails to qualify for any of the statutory exceptions under

section 72(t)(2), we hold that he is liable for the 10-percent

additional tax on distributions from a qualified retirement plan

for 1997 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.
