1 Unless otherwise indicated, subsequent section references

are to the Internal Revenue Code in effect for the year in issue,

and Rule references are to the Tax Court Rules of Practice and

Procedure. 

T.C. Summary Opinion 2002-15

UNITED STATES TAX COURT

BRYAN K. GAUTHIER, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 1625-01S. Filed February 15, 2002.

Bryan K. Gauthier, pro se.

Scott T. Welch, for respondent.

POWELL, 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.1 The decision to be

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

should not be cited as authority.
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2 In the notice of deficiency, respondent determined that

petitioner had additional income from cancellation of a debt

($7,283) and self-employment income ($6,093). Respondent has

conceded both issues. Respondent also disallowed itemized

deductions of $259. Neither in his petition nor at trial has

petitioner raised this issue, and it is deemed conceded. See

Levin v. Commissioner, 87 T.C. 698, 722-723 (1986), affd. 832

F.2d 403 (7th Cir. 1987).

Respondent determined a deficiency in petitioner’s 1998

Federal income tax and an addition to tax under section

6651(a)(1) of $3,433 and $321, respectively. After concessions

by the parties,2 the issues are (1) whether petitioner is liable

for the additional tax under section 72(t) and (2) whether

petitioner is liable for the addition to tax under section

6651(a)(1). Petitioner resided in New Orleans, Louisiana, when

the petition in this case was filed. 

The facts may be summarized as follows. During 1998,

petitioner received a distribution of $4,388.25 from a section

401(k) retirement plan and $2,470.32 from an employee stock

option plan (ESOP). Regions Bank Delchamps, Inc. was the trustee

for both plans. Petitioner included both distributions in gross

income on his 1998 Federal income tax return, but he did not pay

any additional tax under section 72(t). During 1998, petitioner

had not attained the age of 59-1/2. Petitioner did not claim any

deduction for a dependency exemption on his 1998 return. 

Respondent received petitioner’s 1998 Federal income tax

return on July 19, 1999. The return was mailed during that

month, the exact date, however, is unclear. Petitioner had not
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3 Sec. 7491(a) provides that the burden of proof as to a

factual issue shifts to respondent if petitioner introduces

credible evidence as to that issue. Assuming, but not deciding

that this issue is factual, petitioner did not introduce credible

evidence to support a contrary position, and sec. 7491(a) is

inapplicable. 

obtained an extension of time within which to timely file his

1998 tax return. 

Discussion

Distributions From Retirement Plans

Section 72(t)(1) provides:

If any taxpayer receives any amount from a qualified

retirement plan (as defined in section 4974(c)), the

taxpayer’s tax under this chapter for the taxable year in

which such amount is received shall be increased by an

amount equal to 10 percent of the portion of such amount

which is includible in gross income.

A “qualified retirement plan” is defined as, inter alia, “a

plan described in section 401(a) which includes a trust exempt

from tax under section 501(a)”. Sec. 4974(c)(1). Petitioner

contends that the ESOP was not a qualified retirement plan. The

record is devoid of any factual bases for this assertion. 

Furthermore, respondent introduced into evidence a letter from

respondent that determined that the ESOP was a qualified

retirement plan. See sec. 409. We find that the ESOP was a

qualified retirement plan.3

With regard to the distribution from the section 401(k)

plan, petitioner does not dispute that it was a qualified
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retirement plan. Rather, he contends that the exception to

section 72(t)(1) contained in section 72(t)(2)(B) applies to the

distribution from the section 401(k) plan (and by implication to

the ESOP distribution if the ESOP was a qualified retirement

plan).

Section 72(t)(2)(B) provides for an exception to the

additional tax for:

Distributions made to the employee * * * to the extent such

distributions do not exceed the amount allowable as a

deduction under section 213 to the employee for amounts paid

during the taxable year for medical care (determined without

regard to whether the employee itemizes deductions for such

taxable year).

Petitioner contends that he withdrew the funds because he needed

and used the money to pay his mother’s medical bills. Petitioner

has not substantiated that he paid any of his mother’s medical

bills. But, even if he had, the exception contained in section

72(t)(2)(B) applies to payments that would be deductible under

section 213. Section 213(a) allows deductions for medical

expenses paid for “the taxpayer, his spouse, or a dependent (as

defined in section 152)”. While petitioner’s mother could have

been his dependent, see sec. 152(a)(4), in order for her to

qualify as his dependent, petitioner would have had to provide

over half of her support, sec. 152(a). We note that not only is

the record totally devoid of any evidence to support this

conclusion, but also petitioner did not claim his mother as a

dependent on his 1998 return. We conclude that the section
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4 Sec. 7491(c) provides that respondent has the “burden of

production” for the addition to tax. That burden is satisfied 

when respondent shows that the return was not timely filed. It

does not include establishing that there was not reasonable

(continued...)

72(t)(2)(B) exception is not applicable and that petitioner is

liable for the section 72(t) additional tax.

Failure To File Timely Return

Section 6651(a)(1) provides for an addition to tax where a

return is not timely filed “unless it is shown that such failure

is due to reasonable cause and not due to willful neglect”. The

amount of the addition to tax is “5 percent of the amount * * *

[of the correct tax] if the failure is for not more than 1 month,

with an additional 5 percent for each additional month or

fraction thereof * * * not exceeding 25 percent in the

aggregate”. Sec. 6651(a)(1). Petitioner did not obtain any

extensions of time within which to file his 1998 return, and the

return was due on April 15, 1999. The return was filed July 19,

1999. Petitioner does not dispute these dates. Rather he

contends that, if no tax is due on the return as filed, he is not

liable for any addition to tax if it is later determined that

some tax was due. There is no language in section 6651(a)(1)

that remotely supports petitioner’s argument. Petitioner offered

no evidence or other argument with respect to whether the failure

to timely file was due to reasonable cause and not due to willful

neglect.4 We sustain respondent’s determination.
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4(...continued)

cause. See Higbee v. Commissioner, 116 T.C. 438, 446 (2001).

Reviewed and adopted as the report of the Small Tax Case

Division.

Decision will be entered

under Rule 155.