"The IRA owner argued that it did not make sense that he could take a distribution from his law firm's plan without owing the 10% additional tax, but would have to pay the extra 10% tax if he took a distribution from an IRA after having rolled his law firm's plan benefits to the IRA. The appellate court responded that the Code says that the difference here matters and that many of the provisions in the Code are compromises and are arbitrary. The court noted that the tax deferrals provided for amounts in pension plans and IRAs are expensive to the Treasury and so the Code makes using some tax-deferral opportunities costly. Congress established the boundaries, and the court was not authorized to redraw them."  MORE >>