Qualified Plan Distributions Subject to Additional Tax

The U.S. Tax Court held Nov. 6 that $52,684 of distributions from a petitioner’s qualified retirement plans was subject to the Internal Revenue Code Section 72(t) additional tax (Hartley v. Commissioner, T.C., 27913-11, 11/6/12).

Charles Hartley said he had funds distributed from his qualified retirement plans because he was instructed to do so by a family judge in order to pay alimony to his ex-wife. The Internal Revenue Service contended the distribution was subject to the 10 percent additional tax in Section 72(t)(1) and that Hartley did not satisfy any of the exceptions in the statute. ...