January 25, 2021 Early distribution from retirement plan gives rise to IRC Section 72(t) exaction, which is not a penalty, Tax Court holds In a T.C. opinion (Kirgizia I. Grajales v. Commissioner), the Tax Court has held that because a taxpayer received early distributions from a retirement plan, she is liable under IRC Section 72(t) for a 10% exaction on the distributions. Further, the court held that the IRC Section 72(t) exaction is a tax, not a "penalty," "addition to tax" or "addition amount" and therefore is not subject to the IRC Section 6751(b) requirement that written supervisory approval be obtained before imposing it. | ||||
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