T.C. Memo. 2012-311
UNITED STATES TAX COURT
CHARLES L. HARTLEY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 27913-11. Filed November 6, 2012.
Charles L. Hartley, pro se.
Lisa DiCerbo, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
RUWE, Judge: Respondent determined a $2,968 deficiency in petitioner’s
2009 Federal income tax. The amount of the deficiency was subsequently
increased in respondent’s amendment to answer, filed May 22, 2012. Respondent
now asserts that the deficiency for the taxable year 2009 is $5,268. The issue for
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[*2] decision is whether petitioner is liable for the section 72(t)(1)1 10% additional
tax for distributions from qualified retirement plans.
FINDINGS OF FACT
At the time the petition was filed, petitioner resided in West Virginia.
Petitioner received distributions totaling $52,684.11 from qualified retirement
plans during the taxable year 2009. Petitioner reported this amount as income from
pensions and annuities on his 2009 Federal income tax return.
OPINION
As a general rule, the Commissioner’s determinations are presumed correct,
and the taxpayer bears the burden of proving that those determinations are
erroneous. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). However,
the Commissioner bears the burden of proof with respect to any increase in
deficiency. See Rule 142(a)(1). Our conclusion, however, is based on a
preponderance of the evidence, and thus the allocation of the burden of proof is
immaterial. See Estate of Bongard v. Commissioner, 124 T.C. 95, 111 (2005).
Petitioner testified that he had the funds distributed from his qualified
retirement plans because he was instructed to do so by a family court judge in
1
Unless otherwise indicated, all section references are to the Internal Revenue
Code in effect for the year in issue, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
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[*3] order to pay alimony to his ex-wife. Respondent contends that the distribution
is subject to the 10% additional tax in section 72(t)(1) and that petitioner did not
satisfy any of the exceptions in section 72(t)(2).
Section 72(t)(1) provides for an additional tax where a person withdraws
money from a qualified retirement plan.
(1) Imposition of additional tax.--If any taxpayer receives any
amount from a qualified retirement plan (as defined in section 4974(c)),
the taxpayer’s tax under this chapter for the taxable year in which such
amount is received shall be increased by an amount equal to 10 percent
of the portion of such amount which is includible in gross income.
Exceptions to this rule are found in section 72(t)(2). Petitioner has not
identified any exception applicable to this case, nor have we. Regarding petitioner’s
contention that he used the qualified retirement plan distributions to pay for court-
ordered alimony, section 72(t)(2)(C) provides:
(C) Payments to alternate payees pursuant to qualified domestic
relations orders.--Any distribution to an alternate payee pursuant to a
qualified domestic relations order (within the meaning of section
414(p)(1)).
To qualify for the section 72(t)(2)(C) exception the distribution must be made by
the plan administrator to an alternate payee in response to a qualified domestic
relations order (QDRO). Bougas v. Commissioner, T.C. Memo. 2003-194, 2003
Tax Ct. Memo LEXIS 194, at *6. Section 414(p)(8) defines “alternate payee” as
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[*4] “any spouse, former spouse, child or other dependent of a participant who is
recognized by a domestic relations order as having a right to receive all, or a portion
of, the benefits payable under a plan with respect to such participant.” A QDRO
was never prepared with respect to petitioner’s qualified retirement plans.
Furthermore, the distributions were made to petitioner and not to an alternate payee.
As a result, the distributions do not satisfy the QDRO exception of section
72(t)(2)(C). Petitioner also has not satisfied any of the other exceptions of section
72(t)(2). Accordingly, we hold that the $52,684.11 of distributions from petitioner’s
qualified retirement plans is subject to the section 72(t) additional tax.
In reaching our decision, we have considered all arguments made by the
parties, and to the extent not mentioned or addressed, they are irrelevant or without
merit.
To reflect the foregoing,
Decision will be entered for
respondent.