T .C . Summary Opinion 2008-30
UNITED STATES TAX COUR T
JAY ANDREW REINDL, Petitioner v .
COMMISSIONER OF INTERNAL REVENUE, Responden t
Docket No . 8532-065 .
Jay Andrew Reindl, pro se .
Steven M . Webster , for respondent .
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STAT , S . T . JMG E FI S Filed March 13, 2008 .
SWIFT, Judge : This case was heard pursuant to th e 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 other court, and this opinion shall not be treated as precedent for any other case .
SERVED MAR 13
2009 Respondent determined a $3,720 additional tax under section 72(t)(1 ) relating to petitioner ' s Federal income tax for 2004 . Unless otherwise indicated , all section references are to the Internal Revenue Code in effect for 2004 .
The sole issue for decision is whether under section 72(t) petitioner owes a 10-percent additional tax on an early distribution from his individual retirement account (IRA) . Background Some of the facts have been stipulated and are so found . At the time the petition was filed , petitioner resided in North Carolina .
Before 1998 , petitioner worked and contributed to an IRA . During 1998 through 2004, petitioner was employed at various temporary jobs and borrowed money from family members to pay personal expenses .
In 2004, petitioner received as his only source of taxable income a $37 ,200 early distribution from his IRA . At the time of the distribution, petitioner had not attained age 59-1/2, and Federal income taxes of $7,440 were withheld from the distribution to petitioner .
On his timely filed 2004 individual Federal income tax return, petitioner reported the entire $37,200 IRA distribution as taxable income, and he reported a $4,056 Federal income tax liability thereon . Petitioner, however, did not report a section 72(t) 10-percent additional tax on his early IRA distribution . On audit, respondent determined that the section 72(t) 10-percent additional tax applied to petitioner's taxable $37,200 IRA distribution .
Discussion
Generally , a distribution to a taxpayer from an IRA befor e the taxpayer attains age 59-1/2 is subject to a 10-percent additional tax on the taxable amount of the distribution . Sec . 72 ( t)(1) . There are only narrow statutory exceptions to this rule . See, e .g ., Duronio v . Commissioner , T .C . Memo . 200790 (exception under section 72(t)(2 )( E) for early distribution to pay qualified higher education expenses) .
Petitioner does not argue that any recognized exception to the general rule under section 72 ( t)(1) is applicable herein . Petitioner , however, argues that his financial hardship should except him from the 10-percent additional tax under section 72(t)(1) .
While we sympathize with petitioner ' s financial hardship, no statutory or case authority provides an exception from imposition of the additional tax under section 72(t) for financial hardship .' Arnold v . Commissioner , 111 T .C . 250 , 255 (1998) ; Thompson v . Commissioner , T .C . Memo . 2007-327 ; Cole v . Commissioner , T .C . Memo . 2006-44 ; Gallagher v . Commissioner , T .C . Memo . 2001-34 ; Deal v . Commissioner , T .C . Memo . 1999-352 ; Duffy v . Commissioner , T .C . Memo . 1996-556 ; Pulliam v . Commissioner , T .C . Memo . 1996-354 .
Petitioner also argues that his ignorance of the 10-percent additional tax should except him from liability to pay it . However, as a general rule, taxpayers are charged with knowledge of the tax laws . Harrington v . Commissioner , 93 T .C . 297, 314 (1989) .
We conclude that under section 72 ( t) petitioner is liable for the 10-percent additional tax with respect to his $37,200 early IRA distribution .
To reflect the foregoing, Decision will be entere d for respondent .
' Not applicable to petitioner ' s financial hardship ( and not effective before Dec . 21, 2005 ) is a statutory exception to the imposition of the additional tax under sec . 72 ( t) applicable to certain victims of hurricanes Katrina, Rita , and Wilma . Sec . 1400Q ( a)(1), (4)(A ) ; Gulf Opportunity Zone Act of 2005, Pub . L . 109-135 , sec . 201 ( a), 119 Stat . 2596 .