Pre Revenue Ruling 2002-62 calculation

L1: Pre Revenue Ruling 2002-62 calculationI have a client who started his SEPP at the end of 2001 to “avoid” Revenue Ruling 2002-62. He used the long term rate and the 84 table. It appears that every year since 2001 he has been using the same rate, just recalculating based on a new balance. I suggested using the current mid term rate. He felt he was entitled to use the long term rate and the 84 table.
I suppose he has broken his 72t. I am wondering what would be the best course. To continue on? Turn himself in and start over? Go for a PLR?
Any ideas?
Appreciate your help and input.2005-12-19 21:24, By: dogger, IP: [66.42.132.65]

L2: Pre Revenue Ruling 2002-62 calculationAlan gave you the right answer in the other discussion area. Your client made up his own rules – most all PLRs that dealt with recalculation at that time (just prior to 2002-62) were issued based on recalculation based on all factors, not just the balance. I do believe, like Alan, that your client busted the plan at the first recalculation unless he was issued his own PLR based on his method.2005-12-20 04:53, By: Gfw, IP: [172.16.1.72]

L2: Pre Revenue Ruling 2002-62 calculationHello dogger:
The one piece of good news is that your client started their SEPP plan in 2001; so to speak, the good ole wild, wild west days of SEPP plans. During that era, there were a number of “recalculation” PLRs issued each with a slightly different twist being applied.
Finally, in the Summer of 2001, the IRS issued an information letter on this subject (which almost no one knew about) that basically said recalculation was okay as long as all three variables were updated on the annual recalculation date.
Furthermore, I suspect a PLR would be of no value as the IRS typically will not render an opinikon on prior period transactions.
I think it is time to perform a detailed analysis of all of the transactions and calculations from 2001-to-date and look at the financial ramifications of your client’s alternatives.
TheBadger
wjstecker@wispertel.net
2005-12-20 07:03, By: TheBadger, IP: [66.250.23.21]