The IRS doesn’t need advance approval to enforce a tax code provision meant to discourage early distributions from retirement plans because the provision is a tax, not a penalty, the U.S. Tax Court said.
At issue is an element of tax code Section 72(t), which imposes a 10% exaction on taxable early distributions from certain retirement plans.
The IRS issued a notice of deficiency to Kirgizia Grajales for $9,026 of retirement distributions that it argued were subject to the tax code provision. The parties later agreed that only $908.62 of the ...