McGraw v. Comr., T.C. Memo. 2013-152

(acquaintance of petitioner offered to roll over balance of petitioner's annuity into a better performing annuity; account liquidated and petitioner given cash-out check in amount of $67,440 which was deposited into petitioner's bank account; petitioner then learned that wife pregnant; petitioner didn't substantiate medical expenses on 2009 return and didn't claim any medical expenses on line 1 of Schedule A; pregnancy expenses approximately $6,000 and balance of funds from annuity cash-out spent on baby room; petitioner claims exemption from 10 percent penalty tax because amount used for qualified medical expenses; court disagreed due to no documentation and no proof that expenses unreimbursed or exceeded statutory floor of 7.5 percent; 20 percent accuracy-related penalty imposed). 

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