TAX COURT OPINION

Case: Stephen J. & Carol H. Fecher
Docket Number: 922-08S
Judge: Colvin
Opinion Type: bench
Filed: 07/02/2008
Pages: 4

UNITED STATES TAX COURT WASHINGTON , D .C. ~0217 STEPHEN J . and CAROL H . FECHE R Petitioners , V . COMMISSIONER OF INTERNAL REVENU E Respondent . * * * ORDE R Pocket No . 922-08S Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s ORDERED that the Clerk of the'', Court shall transmit herewith to petitioners and to respondent a copy of the pages of the transcript of the trial of the labove case before Judge Joseph R . Goeke at Knoxville, Tennessee , on June 17, 2008, containing his oral findings of fact and opinion rendered at the conclusion of trial . In accordance with the oral findings of fact and opinion, decision will be entered under Rule 1 55 . 1 1 (Signed ) Joseph Robert Goeke Judg e DATED : Washington, D .C . July 2, 2008 SERVED JUL - 3 2008 2 1 Bench Opinion by Judge Joseph'R . Goeke June 17, 200 8 2 Fecher v . Commissioner Docket No . 922-08 S 3 4 THE COURT : The Court has decided to render 5 oral findings of fact and opinion , and the followin g 6 represents the Court' s oral findings of fact an d 7 opinion in this case . The oral findings of fact and 8 opinion shall not be relied upon as precedent in an y 9 other case . 10 These oral findings 'of fact and opinion are 11 made pursuant to section 7459 of the Internal Revenu e 12 Code . Hereinafter references to sections are to 13 sections in the Internal Revenue Code . 14 This case was tried pursuant to section 746 3 15 which was in effect when the petition was filed and 16 was elected by the petitionersa Pursuant to section 17 7463(b), the decision in this case shall not be 18 reviewed in any other court . 19 Certain facts and the; exhibits entered int o 20 evidence in this case were stipulated, and Mr . Fecher 21 testified at trial . The petitioners appeared pro se , 22 and respondent was represented by Lynette Mayfield . 23 The stipulations of fact established that 24 Mr . Fecher withdrew $65,992 as an early withdrawal 25 from an IRA account in 2005 . In the notice o f Heritage Reporting Corporation (202) 628-4888 3 1 deficiency for 2005, respondent determined a 2 deficiency in income tax, inc .uding the addition to 3 tax under section 72(t) in the amount of $16,098 . 4 Respondent also determined the accuracy-relate d 5 penalty in the amount of $3,20 under section 6662(a) . 6 7 Petitioners filed a!joint return for 2005 . The stipulations in this case carry respondent' s 8 burden of production under section 7491(c), so 9 petitioners must show reasonable cause for th e 10 underpayment of tax pursuant to section 6664(c) t o 11 avoid the addition to tax . Petitioners also bear the 12 burden to establish that they are subject to a n 13 exception to the application of 72(t), respondent 14 having established that petitioners made an earl y 15 withdrawal from Mr . Fecher's IRA . Petitioners do not 16 contend that Mr . Fecher attained the age of 59-1/2 i n 17 2005 . Petitioners also admit that Mr . Fecher did not 18 receive unemployment benefits,'', although they assert he 19 was eligible for those benefits . 20 This is an unfortunate situation where Mr . 21 Fecher lost his job and was forced to invade his IRA 22 account to sustain his family's' lifestyle and pay for 23 certain education expenses . Wefind his motives to be 24 earnest but also that he fails to qualify for th e 25 exceptions to section 72(t) . So we sustain Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1 7 1 8 1 9 2 0 2 1 2 2 2 3 24 25 4 respondent's determination of deficiency with th e exception of the concessions respondent made in the stipulation and at trial . Regarding the addition to tax, we find tha t Mr . Fecher was uninformed as to the tax law and wa s under great stress as to the need for thi s distribution . Given these circumstances , we find the underpayment on the facts of this specific case to b e the result of-good faith and that the addition to ta x is not warranted . Given respo#dent' s concessions relative to the deficiency, a Rule 155 computation will be necessary . This ends the Court's oral opinion in thes e dockets . (Whereupon, at 9 :51 a .m ., the bench opinion in the above-entitled matter was concluded . ) Heritage Reporting Corporation (202) 628-4888