TAX COURT OPINION

Case: Liston Edd Stevens
Docket Number: 6114-16
Judge: Morrison
Opinion Type: bench
Filed: 06/02/2017
Pages: 5

CZ UNITED STATES TAX COURT WASHINGTON, DC 20217 LISTON EDD STEVENS, Petitioner v. ) ) ) ) Docket No. 6114-16. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ORDER OF SERVICE OF TRANSCRIPT Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, there is transmitted herewith to petitioner and to respondent a copy of the pages of the transcript of the trial of the above case before Judge Richard T. Morrison, at Mobile, Alabama, on April 27, 2017, containing his oral findings of fact and opinion rendered at the conclusion of trial. In accordance with the oral findings of fact and opinion, a decision will be entered for respondent. (Signed) Richard T. Morrison Judge Dated: Washington, D.C. June 2, 2017 SERVED Jun 05 2017 Capital Reporting Company 3 1 Bench Opinion by Judge Richard T. Morrison 2 April 27, 2017 3 4 5 Liston Edd Stevens v. Commissioner Docket No. 6114-16 THE COURT: The Court has decided to render 6 pral Findings of ct and Oj inion in this case and 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the following represents the Court' s ral indings of 17 F/act and Opinion. The Oral Findings of F ct and RTM G inion shall not be relied on as precedent in any other case. This bench opinion is made pursuant to the authority granted by Section 7459(b) of the Internal Revenue Code and Rule 152 of the Tax Court Rules of Practice and Procedure. References to sections are to the Internal Revenue Code in effect for the year 2013, the year at issue. References to rules are to the Tax Court Rules of Practice and Procedure. Respondent, the IRS, issued a notice of deficiency to the titioner, Liston Edd Stevens, RT asserting a $3,861 deficiency for 2013. The notice of deficiency is premised on the theory that Stevens lo % owed a Cen _p.e.r,c.ea.t additional A retirement distribution tax on a premature C We sustain the notice of deficiency. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 Generally the IRS's determinations are.presumed 4 2 3 4 5 6 7 8 9 correct and the taxpayer bears the burden of.proving that those determinations are erroneous. Rule 142(a), Welch v. Helvering, 290 U.S. 111, 115 (1933). Under Section 7491(a)(1), the burden of proof may shift from the taxpayer to the IRS if the taxpayer produces credible evidence with respect to any factual issue relevant jh ascertaining the taxpayer's to A liability. The findings of fact in this Bench 10 Opinion are based on the preponderance of the 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 evidence; therefore, it is unnecessary to determine who bears the burden of proof. Martin Ice Cream v. Commissioner, 110 T. C. 189, 210 n.jl6 SLM . FINDINGS OF FACT The stipulation of facts is incorporated by this reference. Stevens was a resident of Alabama when he filed the petition. He is under the age of 59 ½. In June 2013, he withdrew $38,613.88 from his own retirement account to care for his father. In December 2013, his father died. He paid $6,280 to a funeral home for his father's funeral. For tax year 2013, he received a Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit Sharing Plans, IRAs, Insurance Contracts, etc., indicating he 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 had made a premature distribution of $38,613.88. Stevens filed a timely return for 2013. On the return, he reported a $38,614 taxable distribution. However, he did not file Form 5329, 5 Additional Taxes on Qualified Plans (Including IRAs) 6 7 8 9 10 11 12 and Other Tax-Favored Accounts, to report the 10% additional tax nor claim an exception to the tax. DISCUSSION Section 72(t)(1) imposes a 10% additional tax on premature distributions from retirement plans. However, section 72(t)(2) (A)(ii) provides that the additional tax does not apply to: "Distributions 13 which are made to a beneficiary (or to the estate of 14 15 16 17 18 19 the employee) on or after the death of the employee." Stevens contends that this exception excludes his distribution from the 10% additional tax. However, the reference to the death of an "employee" is to the employee who contributed to the retirement plan. Here the "employee" is Stevens, so the exception 20 would apply only to distributions from Stevens' 21 22 23 24 25 retirement account made on or after Stevens' death to his beneficiary or to his estate. Therefore, Stevens cannot avail himself of the exception. The distribution is subject to the 10% additional tax. Stevens used the distribution to pay for his 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 father's funeral expenses. Funeral expenses are personal expenses, and therefore are not deductible. 3 Carr v. Commissioner, T.C. Memo, 1979-400, *18. Given our holding, a decision will be entered for the espondent. This concludes the Court' s oral indings of 7 ct and ®pinion in this case. (Whereupon, at 4:11 p.m., the above- entitled matter was concluded.) 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com