Bloomberg Tax
Jan. 17, 2023, 5:00 AM

Case: Distributions from 401(k) Plan Are Taxable, Subject to 10% Additional Tax, Disability Exception Doesn’t Apply (T.C. Memo) (IRC §72)

Taxpayer’s I.R.C. §401(k) plan account distribution is taxable and subject to the 10% additional tax imposed by §72(t)(1) because his diabetes did not render him “unable to engage in any substantial gainful activity” as he was able to work as a software engineer, the U.S. Tax Court held in a memorandum opinion, sustaining the IRS’s deficiency determination. [Lucas v. Commissioner, T.C. Memo 2023-9 (Jan. 17, 2023)]

View Source Document.