Richard Wagner fans will remember the outraged outburst of the Meistersinger von Nürnberg in Act III, Scene V of the “song in praise of song”. I myself cited it in my blogpost “Va T’En, Enfants de la Patrie”, 4/2/14, when befogged by the totalization agreement between France and the United States of America.

But Judge Marvel wants enlightenment from petitioner and IRS on an interesting question, which so far as Judge Marvel and I know has never been decided. And she asks “was ist das?” in Ralim S. El, Docket No. 19012-12, filed 5/16/14.

”Das” is the Section 72(t) 10% chop for early retirement withdrawals. OK, the statute says that, if a taxpayer gets an early distribution “…the taxpayer’s tax under this chapter for the taxable year in which such amount is received shall be increased by an amount equal to 10 percent of the portion of such amount which is includible in gross income.” Section 72(t)(1).

But while the taxpayer’s tax is increased, is the increase a “penalty, addition to tax, or additional amount”? And why should Judge Marvel care?

Well, first because there’s no evidence how old Ralim was when he (or she) got the distribution.

OK, that’s no problem. But who has to prove how old Ralim was?

Enter Section 7491(c), and that’s why Judge Marvel (and I) wants enlightenment.

Section 7491(c) says that “(N)otwithstanding any other provision of this title, the Secretary [IRS] shall have the burden of production in any court proceeding with respect to the liability of any individual for any penalty, addition to tax, or additional amount imposed by this title.”

Therefore, if the 10% chop is one of the Section 7491(c) three, there’s a burden on IRS to show something about how old Ralim was on the date in question.

So, IRS, which is it? Or is the answer “none of the foregoing”? And why?

And Ralim, you get a chance to reply.

Stay tuned.