Nothing really new, but a T C. Memo from Judge Cary Douglas Pugh shows that hardship isn’t hard enough when it comes to early draws from an IRA, and an order from Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan sends another late petitioner to join Antawn Jamal Sanders, for whose story see my blogpost “In the Midnight Hour,” 6/20/23.*

First, Charlie Campana, T. C. Memo. 2025-23, filed 3/19/25. Charlie claims IRS erroneously nixed his refund for an out year, and he thought the IRA trustee withheld all the tax, so he didn’t report his pre-59-1/2 COVID-induced hardship draw. Out years are out if not before the Court via SND or NOD, and economic hardship is not basis for avoiding the 10% add-on. Charlie’s belief in his IRA’s trustee isn’t enough reasonable cause to avoid the Section 6662(a) and (b)(2) five-and-ten chop.

“Petitioner did not testify, nor do we see anything in the record to suggest, that he relied on a tax professional or even considered an information return (e.g., a Form 1099–R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., issued by [trustee]) to determine his tax liability. We acknowledge petitioner’s misunderstanding of the applicable law, and we are sympathetic to his frustration regarding the IRS’s denial of his [out year] claim for refund. But neither is a ground for concluding that there was reasonable cause for his failure. We therefore sustain the penalty.” T. C. Memo. 2025-23, at p. 4.

Next, Gregory B. Klock, Docket No. 495-25, filed 3/19/25, petitioned a SND from Laguna Beach, CA, where it was 9:06 p.m. on Day 90. Unhappily, it was already the next day in The City of the Governmentally Efficient, which is situated in the Eastern timezone.

“Although the Court may sit at any place within the United States, its principal office, its mailing address, and its Clerk’s office are in the District of Columbia. I.R.C. § 7445; Rule 10. A document that is electronically filed with the Court is filed when it is received by the Court as determined in reference to where the Court is located.” Order, at p. 2. (Citation omitted).

* https://taishofflaw.com/2023/06/20/in-the-midnight-hour/