TAX COURT OPINION

Case: Timothy D. Nelson
Docket Number: 4831-09S
Judge: Armen
Opinion Type: summary
Filed: 08/16/2010
Pages: 5

t Su3 'b R tJ T .C . Summary Opinion 2010-11 4 UNITED STATES TAX COUR T TIMOTHY D . NELSON, Petitioner v . COMMISSIONER OF INTERNAL REVENUE, Responden t Docket No . 4831-09S . Filed August 16, 2010 . Timothy D . Nelson, pro se . Lesley Hale , for respondent . ARMEN, Special Trial Judge : This case was heard pursuant to the provisions of section 7463 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 1 Unless otherwise indicated , all subsequent section references . are to the Internal Revenue Code in effect for the year in issue , and all Rule references are to the Tax Court Rules of Practice and Procedure . SERVED AUG 16 2010 - 2 - ,ii;other court, and this opinion shall not be treated as preceden t for . any other case . Respondent determined a deficiency in petitioner's 200 6 ,,Federal income tax of $885 . The sole issue for decision is whether petitioner is liable for the 10-percent additional tax imposed by section 72(t) on an early distribution received in 2006 from a section 401(k) plan . Background Some of the facts have been stipulated, and they are so found . We incorporate by reference the parties' stipulation o f ,,facts and accompanying exhibits . Petitioner resided in the Stat e ,of California when the petition was filed . During 2006, at 46 years of age, petitioner received a distribution of $8,847 from a section 401(k) plan (401(k) plan) . A When petitioner enrolled in the 401(k) plan he requested that 1 0 percent of any withdrawal be withheld as Federal income tax . ilTherefore, when petitioner received his distribution, $ 885 wa s withheld for Federal income tax . Petitioner used the net funds ,r} distributed to pay a balance due for equipment purchased for us e in his line of work . Petitioner timely filed a Form 1040EZ, Income Tax Return fo r Single and Joint Filers With No Dependents . On the return, petitioner reported the 401(k) plan distribution on the line fo r wages salary, and tips, and claimed (and received) a refund of 3 - $846 (tax withheld of $885 less tax reported of $39) . Petitioner did not report the 10-percent additional tax on an early distribution under section 72(t), believing that the Federal income tax withheld from the distribution was sufficient to cover any tax owed . In a notice of deficiency, respondent determined that petitioner is liable for the 10-percent additional tax on the early distribution pursuant to section 72(t) . Discussion In general, the Commissioner's determination- .as set forth in the notice of deficiency is presumed correct, and the taxpayer bears the burden of proving that the determination is in error . See Rule 142(a) ; Welch v . Helvering , 290 U .S . 111, 115 (1933) . 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 .2 Accordingly, petitioner bears the burden of proof . See Rule 142(a) . Section 72(t)(1) imposes an additional tax on an early distribution, from a qualifiedkretirement plan equal to 10 percent of the portion of the amount that is includable in gross income . 2 Regardless of whether the additional tax under sec . 72(t) is a penalty or an additional amount to which sec . 7491(c) applies, and regardless of whether the burdenof .production with respect to this additional tax would be on respondent, respondent has satisfied any burden of production with respect to the distribution . See H . Conf . Rept . 105-599, at 241 (1998), 1998-3 C .B . 747, 995 . I 4 - A qualified retirement plan includes a 401(k) plan- See secs . 401(a), (k) (1) , 4974(c)(1) . The 10-percent additional tax . is intended .to .discourage .. premature, distributions from retirement ,plans . Dwyer v . Commissioner , 106,T .C . 337, 340 (1996) ; see als o Rept . 93-383, at 134 (1973), 1974-3 C .B . (Supp .) 80, 213 . The 10-percent additional tax does not apply to certai n distributions, including, distributions : (1) To an employee ag e 59-1/2 or older, or (2) to an,employee after separation fro m !service after attainment of age 55 . Sec . 72(t)(2)(A)(i), (v) . Petitioner does not dispute that the $8,847 distributio n from his 401(k) plan was an early distribution from a qualified ,plan . Indeed, petitioner properly included the distribution i n gross income . When petitioner received the distribution from the-401(k ) plan, he was-46 years of age . Petitioner used the funds withdrawn from the 401(k) plan to pay a balance due for equipmen t "'purchased for use in his line of work . Regrettably for- petitioner, no exception applies for that purpose ; therefore , petitioner's distribution remains subject to the 10-percen t additional tax . Accordingly, we must sustain respondent' s determination that petitioner is liable for the section 72(t) 10- percent additional tax . Finally, regarding petitioner's statements concerning th e ,accrual of interest, any claim for abatement is not cognizable in an action for redetermination of deficiency . See sec . 6404(e), (h) ; Rule 280(b) ; see also Bax v . Commissioner , 13 F .3d 54, 56-57 (2d Cir . 1993) (Tax Court ordinarily lacks jurisdiction to consider interest on a deficiency in the context of an action for redetermination of deficiency) ; Pen Coal Corp . v . Commissioner , 107 T .C . 249, 255 .(1996) ( same) . Conclusion We have considered all of the arguments made by petitioner, and, to the extent that we have not specifically addressed them, we conclude that they do not support a result contrary to that reached herein . To reflect the foregoing, Decision will be entere d for respondent .