50% penalty??????

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L1: 50% penalty??????GFW– Is there a 50% penalty vs a 10% penalty these days for busting a SEPP? That would be new news to me that’s for sure….By: Gfw Date: 7/14/2002 Subject: Attn: oldcrow >> 3) The IRS will not come after tax/penality money if you run out>>of funds before the 5yr term is up (what I was told)>>as long as you continue until your fund is “bust”.Did they (or would they) put it in writing? Only because of the new final regs would the 50% penalty not be charged because there was insufficient funds in the IRA to meet the minumum distribution rules! 2002-07-14 22:45, By: endgame, IP: [127.0.0.1]
L2: 50% penalty??????Read the post carefully – it refers to the 50% penalty tax on Minimum Distributions, not SEPP plans.It was in response to the poster saying that the IRS stated that there would be no imposition of the 10% penalty if the SEPP plan went bust – this would be a new position!The reference to the 50% stated that only because of the new MD rules that they no longer do it on MD plans. However, there was no mention in the final regs of waiving the 10% on SEPP plans.Hopes this helps to clarrify!2002-07-15 04:58, By: Gfw, IP: [127.0.0.1]