-
VINCENT A. SUAREZ, JR. AND ESTHER SUAREZ, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, RespondentSUAREZ v. COMMISSIONERNo. 19455-03S
United States Tax Court T.C. Summary Opinion 2005-71; 2005 Tax Ct. Summary LEXIS 159;June 6, 2005, Filed*159 PURSUANT TO INTERNAL REVENUE CODE SECTION 7463(b), THIS OPINION MAY NOT BE TREATED AS PRECEDENT FOR ANY OTHER CASE.
Vincent A. Suarez, Jr. andEsther Suarez , Pro sese.Ric D. Hulshoff , for respondent.Panuthos, Peter J.PETER J. PANUTHOSPANUTHOS, 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.Respondent determined a deficiency of $ 3,359 in petitioners' Federal income tax for 2001. The sole issue for decision is whether petitioners are liable under
section 72(t) for the 10-percent additional tax on an early distribution from a qualified retirement plan.Background
Some of the facts have been stipulated, and they are so found. The stipulation of facts and the attached exhibits are incorporated by this reference. Petitioners resided in Sierra Vista, Arizona, at the time the petition was filed.
*160 Petitioners, Victor A. and Esther Suarez, are husband and wife. During the year in issue (2001), they were homeowners of property at 4934 Raffaele Drive, in Sierra Vista, Arizona. In 2001, Victor A. Suarez (hereinafter petitioner) withdrew $ 33,590
section*161 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 undersection 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 undersection 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*162 buyer distribution is any payment or distribution received by an individual to the extent such payment or distribution is used by the individual to pay qualified acquisition costs with respect to a principal residence of a first-time home buyer who is such individual.Sec. 72(t)(8)(A) .Sec. 72(t)(8)(D)(i)(I) .Petitioners cannot avail themselves of the first-time home buyer exception. While the record is not entirely clear, the parties stipulated that "During 2001, petitioners were existing homeowners residing at 4934 Raffaele Drive, Sierra Vista, Arizona". There was no argument put forth by petitioners that this was not their principal residence. Based on this record, *163 we conclude that petitioner's IRA distribution does not come within the provisions of
section 72(t)(2)(F) .Petitioners argue that the withdrawal did not cause the Government harm because they have other retirement accounts, and that petitioners will not be a burden to the Government when they 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">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. SeeWilkins v. Commissioner, 120 T.C. 109">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">122 F.3d 835 , 837 (9th Cir. 1997), affg.T.C. Memo 1995-298">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*164 report of the Small Tax Case Division.
To reflect the foregoing,
Decision will be entered for respondent.
Document Info
Docket Number: No. 19455-03S
Citation Numbers: 2005 Tax Ct. Summary LEXIS 159, 2005 T.C. Summary Opinion 71
Judges: "Panuthos, Peter J."
Filed Date: 6/6/2005
Precedential Status: Non-Precedential
Modified Date: 11/20/2020