Martin Edward Caulfield v. Commissioner, T.C. Summary Opinion 2003-161

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U.S. Tax Court

Martin Edward Caulfield v. Commissioner

T.C. Summary Opinion 2003-161 · Docket 19485-02S · Decided Nov 7, 2003 · Couvillion · T.C. Summary Opinion

Petitioner's basic argument is that, because he was more than 59-1/2 years old at the time the IRA distributions were made, he believed that the distributed proceeds were not taxable as income. Petitioner was also disabled, unemployed, and "needed the money to live". Since he was retired, he understood "drawing from my retirement account" to mean that such funds would not constitute income.

Petitioner's beliefs about the distributions being nontaxable because of his age are in error. Generally, section 72(t)(1) imposes an additional tax on early distributions from qualified retirement plans. That additional tax is 10 percent of the portion of the plan distribution includable in gross income. There are certain distributions to which the section 72 additional tax does not apply, one of which is with respect to distributions on or after the date the recipient taxpayer attains the age of 59-1/2. Since petitioner had attained age 59-1/2 when the Sunoco distributions were made, petitioner was not liable for the 10-percent additional tax under section 72(t). However, respondent did not determine that petitioner was liable for this additional tax. Respondent determined that the distributions simply constituted income for the amounts set out in the information returns filed by the payor, Sunoco. Moreover, petitioner's health status and his need for the money are not grounds for the exclusion of the distributions from gross income, nor does "drawing" from his retirement funds connote that such funds are not taxable. Respondent, therefore, is sustained on this issue.

Petitioner also contends that he is entitled to a credit for prior payments or income tax withholdings in excess of the amount stated in the Form 1099-R filed by Sunoco. However, the Court lacks jurisdiction to consider this argument because, under section 6211, a deficiency is determined without regard to the amount of tax withheld on a taxpayer's income. Redcay v. Commissioner , 12 T.C. 806, 809-810 (1949); sec. 301.6211-1(b), Proced. & Admin. Regs.

Reviewed and adopted as the report of the Small Tax Case

Division.

Decision will be entered for respondent.

Footnotes

¹ The decision to be entered is not reviewable by any other court, and this opinion should not be cited as authority. Respondent determined a deficiency of $1,958 in petitioner's 2000 Federal income tax.

² Some of the facts were stipulated. Those facts and the accompanying exhibits are so found and are incorporated herein by reference. Petitioner’s legal residence at the time the petition was filed was Glenwood, Arkansas. Petitioner was an electronic computer technician and retired from Sunoco Oil Co. (Sunoco) during 1993, after working 12 years with that employer. As an employee of Sunoco, petitioner was the beneficiary of two retirement plans, which were qualified under section 401(k). During the year 2000 petitioner received a distribution from one plan in the amount of $12,500 and a distribution from the other plan in the amount of $14,000, or a total of $26,500. Sunoco issued to petitioner two Forms 1099-R, Distributions From Pensions, Annuities, Retirement or ProfitSharing Plans, IRAs, Insurance Contracts, etc., which state that the taxable portion of the $12,500 distribution was $12,389.64,

³ Additionally, on his return, petitioner claimed a tax withholding credit of $3,547.

Sections addressed

I.R.C. § 72 Annuities; certain proceeds of endowment and life…
(t) (t)(1)