Redefining Mental Disability in the Treasury Regulations

5 Pages Posted: 6 Sep 2003  

Sarah B. Lawsky

University of California - Irvine School of Law


The regulations accompanying section 72 of the Internal Revenue Code, relating to penalties for early withdrawals from qualified retirement plans, contain an outdated definition of mental disability under which almost no one with a mental illness today could be found to be disabled. This definition is incorporated by reference in many sections throughout the code and regulations. This article looks at the definition of disability in section 72(m)(7) and its corresponding regulations and shows how the current law was applied in the recent case of Keeley v. Commissioner. The article then shows that current understandings of mental disability, as well as the history of the statute and its regulations, mandate revision of the regulations. The article concludes that the current language of the regulations allows courts some leeway in determining whether an individual is disabled, however, and that courts therefore need not feel constrained by the outmoded sections of the regulations.

Keywords: Tax law, disability, section 72

JEL Classification: K34

Suggested Citation

Lawsky, Sarah B., Redefining Mental Disability in the Treasury Regulations. Tax Notes, Vol. 100, July 28, 2003. Available at SSRN: or

Sarah B. Lawsky (Contact Author)

University of California - Irvine School of Law ( email )

401 E. Peltason Dr.
Irvine, CA 92697
United States

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