UNITED STATES TAX COURT
VINCENT A. SUAREZ, JR. AND ESTHER SUAREZ, Petitioners v
.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 19455-03S. Filed June 6, 2005.
Vincent A. Suarez, Jr. and Esther Suarez, pro sese. Ric D. Hulshoff , for respondent.
PANUTHOS, Chief 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. The decision to be entered is not reviewable by any other court, and this opinion should not be cited as authority. Unless otherwise indicated, all subsequent section references are to the Internal Revenue Code in effect at relevant times.
the amount of $33,590. Petitioners did not report, on their 2001 return, the additional 10-percent tax imposed by section 72(t) with respect to the $33,590 distribution.
In the notice of deficiency, respondent determined that petitioners are liable for the 10-percent additional tax on the early distribution from petitioner’s IRA. Petitioners acknowledge that the distribution from the IRA does not qualify for any of the exceptions under section 72(t)(2)(A). Discussion Section 72(t)(1) imposes an additional tax on early distribution from qualified retirement plans equal to 10 percent of the portion of such amount which is includable in gross income. A qualified retirement plan includes a qualified pension or profit sharing plan under section 401(a). Sec. 401(a)(1). The section 72(t) additional tax does not apply to certain distributions. Since petitioners concede that they do not come within any of the exceptions under section 72(t)(2)(A), we consider whether any other provisions would permit petitioners to be relieved from the 10-percent additional tax.
Section 72(t)(2)(F) provides, in relevant part, an exception to the 10-percent additional tax for distributions to an individual from an individual retirement plan which are qualified first-time home buyer distributions. A qualified first-time home buyer distribution is any payment or distribution received by an retire because they have “sufficient money to take * * * care of [them]selves”.
Deductions, which are strictly construed, are a matter of legislative grace, and the burden of clearly showing the right to the claimed deduction is on the taxpayer. INDOPCO, Inc. v. Commissioner , 503 U.S. 79, 84 (1992). We are bound by the Internal Revenue Code, and it is within the province of the legislature to decide the circumstances of inclusion, deductions, and exceptions. See Wilkins v. Commissioner , 120 T.C. 109, 112 (2003). The 10-percent additional tax applies to early distributions unless otherwise specifically exempted. Roundy v. Commissioner , 122 F.3d 835, 837 (9th Cir. 1997), affg. T.C. Memo. 1995-298.
Accordingly, respondent’s determination that petitioners are liable for the 10-percent additional tax is sustained. Reviewed and adopted as the report of the Small Tax Case Division.
To reflect the foregoing, Decision will be entered for respondent .