In this "small" Tax Court case, the petitioner was an electrical contractor that had completed a project and was owed payment. In the process of getting paid for his work, the petitioner took a distribution from his SEP-IRA and then took out a loan with the same company that maintained his IRA account with the loan proceeds to be rolled back into the IRA within 60 days. However, the funds were rolled back into the account on the 66th day after the petitioner received the distribution from the IRA account. The petitioner received a 1099-R reporting the distribution as an early distribution but not showing a taxable amount. The petitioner filed his return for the year and didn't include in income the IRA distribution. The IRS claimed that a tax deficiency existed including a 10 percent early withdrawal penalty. The court determined that no deposit had occurred with 60 days and that petitioner had not actually borrowed from his IRA (note - had he done so, the full amount of the IRA account would have been included in income under I.R.C. Sec. 4975). The court noted, however, that the petitioner was free to pursue an IRS waiver from the 60-day rule in accordance with Rev. Proc. 2003-16). The court upheld the imposition of the 10 percent penalty. Alexander v. Comr., T.C. Sum. Op. 2014-18.