It Doesn’t Matter

Judge Mark V Holmes has bad news for Mary Walsh Woll & Jonathan Woll, Docket No. 7024-20, filed 4/29/21, in this off-the-bencher. Or maybe she’s Molly Walsh Woll, because her name is “Mary” on the order and “Molly” on the transcript. Whichever it is, she owes the Section 6662(a) accuracy chop on top of the 10% whatever-it-is on the 401(k) drawdown she took when she lost her job.

Mary/Molly is a lawyer. She got cut from Thompson-Reuters, rolled part of her 401(k), but needed the rest to live. She disclosed the drawdown on herself-prepared 1040MFJ, but didn’t file Form 5329 with it, nor did she bring the software she used to do her return to the trial.

IRS hit Mary/Molly with a SNOD for the 10%, as Mary/Molly was neither “exempt from the Law of Fifty and Five” nor 59-1/2 during year at issue. And they added the Section 6662(a) chop at no extra charge.

Well, the 10% is a given. Mary/Molly qualifies for none of the statutory exemptions, credible as her hardship testimony is.

Now the Genius Baristas have once again published a transcript from which I can’t copy-and-paste. And while I hang on every one of Judge Holmes’ words, and admire his neo-Piedmontese imposition of his own grammatical neologisms (explanation below), I will not copy them at length herein. If I wanted to be a typist, I would have been.

So check out the transcript at pp. 7 – 9. Mary/Molly might could have been befogged by the references to Code 2 and Code 1 in Box 7 of the 1099-R she got from the 401(k) trustee, as the same are described in the instructions for Form 1099-R. Now of course Judge Holmes is generally (love that word) the first to dismiss forms and instructions when they conflict with IRC and Regs. But here he reviews them, and finds that a lawyer like Mary/Molly should have known to send in Form 5329.

Boss Hossery is off the table, as the chop was computer-generated when the unreported 10% whatever-it-is went in. Untouched by human hands.

Oh, the reference to Piedmontese. The story is that when Vittorio Emanuele II, formerly King of the combined Kingdom of Piedmont, became the first King of a unified Italy in 1861, he said that he would so unify Italy that he would impose upon all Italians even his errors of grammar.