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72t 5year tracking

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Last Updated On
Bysem

L1: 72t 5year trackingHow does the IRS track individuals taxpayers dates as it relates to the 5 year rule? If a taxpayer starts a 72t at for example at 58how is the start and end date followed by the IRS? Also if the plan goes bust how are those dates tracked?2008-02-01 12:43, By: sem, IP: [74.237.252.117]
L2: 72t 5year trackingIt is my understanding that the IRS does not track SEPP72-T plans. Similarly, they do not track ISO AMT cost basis, stock costs, etc. The IRS does not track ROTH IRA contributions or ROTH IRA CONVERSIONS for their 5-year holding periods either. It is the taxpayer”s responsiblity “to keep accurate records”. This becomes an issue only upon audit. However, if you do not report it properly, you would possibly be subject to a negligence penalty and interset, at the least, or fraud penalties (possibly 50%) if you understated taxable incomeby more than 25%.
If someone is thinking of playing the “audit lottery” with SEPP 72-T, I would warn you against it.
Also, having been forewarned on this site, anyone should really not try it.
P.S. “Ignorance of the law is not a valid defense.”2008-02-01 19:46, By: dlzallestaxes, IP: [141.151.24.102]

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