United States Tax Court

T.C. Summary Opinion 2024-10

EDWARD GEORGE SHLIKAS,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

—————

Docket No. 12027-22S. Filed June 20, 2024.

—————

Edward George Shlikas, pro se.

Susan A. Bechtel, for respondent.

SUMMARY OPINION

PANUTHOS, Special Trial Judge: This case was heard pursuant 

to the provisions of section 74631 of the Internal Revenue Code in effect 

when the Petition was filed. Pursuant to section 7463(b), the decision 

to be entered is not reviewable by any other court, and this Opinion shall 

not be treated as precedent for any other case.

In a notice of deficiency dated February 28, 2022, respondent 

determined a deficiency in federal income tax of $13,702 and a section 

6662(a) accuracy-related penalty of $2,740 for taxable year 2019 (year 

in issue).

1 Unless otherwise indicated, statutory references are to the Internal Revenue 

Code, Title 26 U.S.C. (Code), in effect at all relevant times, and Rule references are to 

the Tax Court Rules of Practice and Procedure.

Served 06/20/24
2

After concessions,2 the issue for decision is whether petitioner is 

subject to the 10% additional tax on early retirement distributions for 

tax year 2019.

Background

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

incorporate the Stipulation of Facts and attached Exhibits by this 

reference. The record consists of the Stipulation of Facts with attached 

Exhibits and the testimony of petitioner, Edward George Shlikas.

Petitioner resided in Delaware when the Petition was timely filed.

I. Petitioner’s Property

Petitioner’s mother purchased a home in Jarrettsville, Maryland

(property), in 2009. Petitioner’s mother was diagnosed with breast 

cancer in 2010. Around 2015 petitioner resigned from his job as a 

facilities manager at a private school to take care of his mother as her 

condition worsened. Petitioner also terminated his apartment lease and 

moved in with his mother, becoming her caregiver and the caretaker of 

the property.

Petitioner’s mother died in 2018. In her will the property was left 

to petitioner and his brother, Gregory Mark Shlikas. On November 9, 

2019, the property was transferred by deed from petitioner’s mother’s

estate to petitioner and Gregory Mark Shlikas as joint tenants with 

right of survivorship.

Petitioner later arranged to purchase his brother’s share of the 

property. In order to pay for his brother’s share petitioner requested 

distributions from his retirement accounts and received $45,921 and 

$91,103 from TIAACREF Brokerage and TIAA Administrative Services

LLC, respectively, for a total of $137,024.

On December 5, 2019, the property was transferred to petitioner

as the sole owner for the sum of $130,000. Petitioner was 50 years old 

in 2019 when the distributions were made.

II. Petitioner’s Tax Return

Petitioner timely filed Form 1040, U.S. Individual Income Tax 

Return, for the year in issue. Petitioner reported $137,024 of taxable 

2 Respondent conceded the section 6662(a) accuracy-related penalty of $2,740.
3

income as a retirement distribution. Petitioner submitted two Forms

1099–R, Distributions From Pensions, Annuities, Retirement or ProfitSharing Plans, IRAs, Insurance Contracts, etc., for TIAACREF 

Brokerage and TIAA Administrative Services LLC, respectively. The 

boxes were not checked on the Forms 1099–R to indicate that the 

accounts from which the distributions were made were a Traditional, an

SEP, or a Simple individual retirement account (IRA).

On February 28, 2022, respondent issued a notice of deficiency

determining that petitioner was liable for a 10% additional tax on early

distributions from a qualified retirement plan under section 72(t).

Discussion

I. Burden of Proof

The Commissioner’s determinations in a notice of deficiency are 

generally presumed correct, and taxpayers bear the burden of proving 

them erroneous.3 Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 

(1933).

Petitioner reported the income and does not dispute its inclusion. 

Petitioner bears the burden of proving that he is not liable for the 10% 

additional tax per section 72(t).

II. Section 72(t) Additional Tax

Section 72(t) imposes a 10% additional tax on early distributions 

from qualified retirement plans as defined in section 4974(c) unless an 

exception applies under section 72(t)(2)(A). An early distribution is 

defined as one made before “the date on which the employee attains age 

59 1/2.” See § 72(t)(2)(A)(i). Exceptions to the additional tax on early 

distributions include, among others, distributions made for medical 

expenses, health insurance premiums for unemployed individuals, 

higher education expenses, and for first home purchases. See generally

§ 72(t). A qualified first-time homebuyer may except up to a lifetime 

limit of $10,000 from the 10% additional tax on early distributions from 

an individual retirement plan if he had no present ownership interest in 

3 Pursuant to section 7491(a), the burden of proof as to factual matters shifts 

to the Commissioner under certain circumstances. Petitioner has neither alleged that 

section 7491(a) applies nor established his compliance with its requirements. 

Therefore, petitioner bears the burden of proof.
4

a principal residence during the two years before acquisition of a home. 

See § 72(t)(2)(F), (8)(D)(i).

Petitioner does not dispute that he was under the age of 59-1/2 at 

the time of the distribution. Instead, petitioner contends that the age of 

59-1/2 years is an arbitrary number considering that the retirement age

to qualify for Social Security is higher than 59-1/2 years.

Petitioner contends that he is eligible for the qualified first-time 

homebuyer exception from additional tax of $10,000 per section 

72(t)(2)(F). This exception is only available for distributions made from 

an individual retirement plan.4 § 72(t)(2)(F). The record demonstrates 

that he did not indicate in his tax return for the year in issue that the 

distribution was made from an individual retirement plan. While he 

testified that he had a section 403(b) plan and that part of the 

distribution was made from a Roth IRA which qualifies as an individual 

retirement plan, petitioner has not produced any evidence in support of 

his position. Therefore, petitioner is not eligible for the qualified firsttime homebuyer exception from additional tax.5

Petitioner contends that the imposition of the 10% additional tax 

on early distributions is arbitrary and capricious as the exceptions 

under section 72(t)(2) establish arbitrary qualifications. He contends it 

is arbitrary to allow an exception for using a distribution for higher 

education expenses per section 72(t)(2)(E) but not for the purchase of a 

home. He alternatively argues that had he made the distribution just 

30 days later in 2020 instead of 2019, he would have qualified for the 

exception made for distributions under the Coronavirus Aid, Relief, and 

Economic Security Act, Pub. L. No. 116-136, § 2202, 134 Stat. 281, 340–

43 (2020).

The Court is a court of limited jurisdiction and lacks general 

equitable powers. Commissioner v. McCoy, 484 U.S. 3, 7 (1987). There 

is no authority in the Code or caselaw for an equitable or hardship 

exception to the imposition of additional tax under section 72(t) on early 

4 An individual retirement plan is an IRA or an annuity as defined in section 

408(a) and (b). See § 7701(a)(37).

5 Respondent argues that on the basis of the deed dated November 9, 2019,

petitioner had an ownership interest in the property before the purchase of his 

brother’s share on December 5, 2019. See § 72(t)(8)(D)(i). Since we conclude that the 

distribution was not made from an eligible individual retirement plan, we need not 

opine further.
5

distributions from a retirement account. See Arnold v. Commissioner, 

111 T.C. 250, 255 (1998).

The record demonstrates that an early distribution was made to 

petitioner, and he has not demonstrated that an exception applies to the 

imposition of the 10% additional tax per section 72(t). Accordingly, we 

will sustain respondent’s determination.

We have considered all arguments, and, to the extent not 

addressed herein, we conclude that they are moot, irrelevant, or without 

merit.

To reflect the foregoing,

Decision will be entered for respondent.