TAX COURT OPINION

Case: Steven Michael Panczak
Docket Number: 20075-09
Judge: Colvin
Opinion Type: bench
Filed: 11/22/2010
Pages: 7

UNITED STATES TAX COURT WASHINGTON, DC 20217 STEVEN MICHAEL PANCZAK, r Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) ) O R D E R Docket No. 20075-09. Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith the pages of the to Petitioner and to respondent a copy of transcript of Vasquez at Chicago, oral the trial. findings of the trial in the above case before Judge Juan F. Illinois, on October 29, 2010, containing his fact and opinion rendered at the conclusion of In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Juan F. Vasquez Judge Dated: Washington, D.C. November 22, 2010 SERVED W 2 2010 IN THE UNITED STATES TAX COURT 1 In the matter of: STEVEN MICHAEL PANCZAK, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) Docket No. 20075-09 ) ) ) ) ) Room 3908 Kluczynski Federal Building 230 S. Dearborn Street | Chicago, Illinois Friday, October 29, 2009 The above entitled matter came on for bench opinion, pursuant to notice, at 10:15 a.m. BEFORE: HONORABLE JUAN F. VASQUEZ Judge APPEARANCES: For the Petitioner: STEVEN MICHAEL PANCZAK, pro se For the Respondent: ABBY RAINES, ESQ. Internal Revenue Service 200 W. Adams Street, Suite 2300 Chicago, 312-368-8567 Illinois 60606 Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 P E Q C E E 2 K N Q g 2 (10:15 a.m.) THE CLERK: Recalling from the calendar Docket Number 20075-09, Steven Michael Panczak. THE COURT: Very well. (Whereupon, a bench opinion was rendered.) // // // // // // // // // // // // // // // // // // // Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 Bench Opinion by Judge Juan F. Vasquez Docket No. 20075-09 October 29, 2010 The Court has decided to render oral findings of fact and opinion in this case. The following represents the Court's oral findings of fact and opinion. This is the case of Steven Michael Panczak, Petitioner, versus Commissioner of the Internal Revenue Service, Respondent; Docket Number 20075-09. This bench opinion is made pursuant to the authority granted by virtue of section 7459(d) and Rule 152. All section references are to the Internal Revenue Code as in effect for the year in issue; in this case, 2007. And allAreferences are to the Tax Court Rules of Practice and Procedure. Respondent determined a deficiency against Petitioner for his 2007 taxable year in the amount of $800 under Section 72(t), so the issue in the case is whether Petitioner is subject to the 10-percent additional tax for early distributions under Section 72(t). We hold that he is. As we stated, Respondent determined that the -- in this case Mr. Panczak had a distribution, it has been stipulated, from his 401(k) plan, and he received a 1099-R for that. Fortn SN He had a distribution of Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 $8,000, which was reported to the IRS and to him on a 1099-R issued by the Massachusetts Mutual Life Insurance Company in the amount of 8,000. He did appear, as Respondent also appeared. He does agree that he received the $8,000. He did include it in income but on the wrong line. He included it as wages, but he did pay the tax on that, but he did not include the 72(t) penalty. He has also stipulated -- it has been stipulated that during the year 2007 -- that he was born on September 26, 1956, so therefore he does not qualify for the -- he was not age 59-1/2 by the end of the year 2007. Respondent in this case determined that the distribution made to Petitioner out of his 401(k) was subject to the 10-percent additional tax on early withdrawals imposed by Section 72 (t) . Section 72(t) (1) imposes a 10-percent additional tax on early distributions from qualified retirement plans. In this case a qualified retirement plan includes this type of plan, the 401(k) plan. And that's under Section 408(a) and also Section 4974. Section 72(t) (2) (A) lists the types of distributions to which the additional tax does not apply. Petitioner has the burden of proving his Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 5 entitlement to any of these exceptions. You can see Bunney v. Commissioner at 114 T.C. 259,A'(2000) and Matthews v. Commissioner, 92 T.C. 351, 361-362,/'(1989), aff'd 907 F.2d 1173 (D.C. Cir,sue./1990). A Petitioner has not produced any evidence that any exception applies in this case. Accordingly we sustain Respondent's determination as to the Section 72 (t ) additional tax . The foregoing represents the Court's oral findings of fact and opinion in this case. This concludes this case. Thank you. (Whereupon, at 10 : 30 a . m. , the bench opinion in the above-entitled matter was concluded.) // // // // // // // // // // // Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 17 18 19 20 21 22 Certificate of Transcriber and Proofreader 6 CASE NAME: Steven Michael Panczak DOCKET NUMBER: 20075-09 We, the. undersigned, do hereby certify that the foregoing pages, numbers 1 through inclusive, are the true, accurate and complete transcript prepared from the verbal recording made by electronic recording by Rod Prunckle , on October 29, 2009 before the United States Tax Court at its session in Chicago, Illinois , in accordance with the applicable provisions of the current verbatim reporting contract of the Court, and have verified the accuracy of the transcript by comparing the typewritten transcript against the verbal recording. (Transcriber) /02/09 (Date) 1/02/Ø9 (Proofreader) (Date) Heritage Reporting Corporation (202) 628-4888