The taxpayer severed employment with employer at a time when she was not yet 59 and 1/2 years old and received her 401(k) via check. The taxpayer asked the employer to withhold taxes, and the employer withheld 20%, sent the amount to the IRS and gave the taxpayer a Form 1099-R. The taxpayer reported the income from the 401(k) and the withheld amount on her self-prepared return. IRS claimed that an additional 10 percent penalty tax applied on the early distribution. The taxpayer couldn't show that she used the funds to pay medical expenses, health insurance premiums, expenses associated with a disability or to buy a first home. Thus, no safe harbor applied. The taxpayer argued that the penalty tax shouldn't apply because she asked the employer to withhold all taxes. The court agreed with the IRS that the taxpayer needed to report the 10 percent penalty tax on line 58, and $639 refund not allowed. Fields v. Comr., 2014 T.C. Memo. 48.