No evidence disability existed when distribution was made 402(c)), because the additional tax is only applied to distributions that are included in the taxpayer's gross income. In addition, a taxpayer can avoid the 10% additional tax by rolling over the distribution to another eligible retirement plan within 60 days (Sec. 72(m)(7) at the time of the distribution and distributions that are used to pay medical expenses of the taxpayer, his spouse, or his dependent. These exemptions include distributions made to taxpayers that quality as disabled under Sec. 72(t)(1), unless the taxpayer qualifies for one of the exemptions in Sec. 402(a), 408(d)) and that the IRS may add an additional income tax equal to 10% of the early distribution under Sec. Two difficulties that can arise from an early withdrawal from a retirement account are that the distribution may have to be included in taxable income (Secs.
6110(k)(3), can be used to "reveal the interpretation put upon the statute by the agency charged with the responsibility of administering the revenue laws" ( Hanover Bank, 369 U.S. Even though a small Tax Court case cannot be cited as precedent, it may be used to determine the Tax Court's interpretation of the statute similar to the way IRS private letter rulings, which also "may not be used or cited as a precedent," under Sec. 7463 and therefore may not be used as precedent however, this does not mean that these rulings are necessarily not good law. Two of the three cases discussed in this article were small Tax Court cases heard under Sec. (Qualified retirement plans include IRAs. This article examines three recent Tax Court cases where the petitioners attempted to use medical hardship to avoid the Code's rules on early withdrawals. Many taxpayers assume that withdrawals from retirement accounts to pay for medical expenses qualify automatically as hardship exemptions from any additional 10% tax for early withdrawals, but this is not the case.
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