72t paperwork

L1: 72t paperworkIam planning to set a sepp in the near future. I have my IRA with T-Rowe Price. They do not seem to be helpful in setting this up for me I was wondering if someone can recommend someone in the Ontario, California area that can help me with this only and not try and also manage my fund. Also if anyone would know what amount is charged for this service. thanks.2007-12-14 11:27, By: oliver, IP: [75.140.23.34]
L2: 72t paperworkMany people posting in this forum have been very pleased with Vanguard. Even though they are3,000 miles awayin Malvern, PA, their phones are handled by Americans (not outsourced overseas). In high volume days, even John Brennan, their President, and previously, John Bogle, the founder of Vanguard and the Index 500, answer the phones as part of their “SWISS ARMY” coverage. (FULL DISCLOSURE – Occassionally my daughter answers the phones as part of the Swiss Army. She”s been working there for 15 years,administratively, butnot in investments.) In addition to the Vanguard Mutual Fund family of funds, they also have Vanguard Brokerage if you want to select your own investments.
Vanguard understands SEPP 72-T regulations and paperwork.2007-12-14 12:13, By: dlzallestaxes, IP: [151.197.92.208]

L2: 72t paperworkI have my IRA / SEPP with Vanguard and I can confirm that they do a good job. Their web site is particularly good, as is the assistance that you can get via phone or email.
Ed2007-12-15 15:31, By: Ed_B, IP: [67.170.159.37]

L2: 72t paperworkHowever, it would be nice for Vanguard to support their efficiency in this area with exception coding on the 1099R forms they issue.2007-12-15 20:35, By: Alan S., IP: [24.116.165.60]

L2: 72t paperworkVanguard has a legal opinion on why they cannot do the coding that you want. Vanguard, and all funds, have no proof of all of the factors that would make the coding valid, especially proof of your age that you are over 59 1/2. They have decided that the 5329 should be filed by the taxpayer who is taking responsibility for the accuracy of all of their information, rather than shifting that responsibility to the fund. Similarly, Vanguard, and all fund fiduciaries, have no documentation to indicate if there is any Non-Deductible contributions in an IRA because that information is only available to the taxpayer and his tax preparer (and the IRS) based upon having filed an 8606 form(s).
We know that taxpayers give the funds their date of birth, and this is used to determine when Required Minimum Distributions (RMD) must start at 70 1/2, but apparently that does not cause as much of an issue as the 1099-R and 5329 coding.
I wonder if we could get the coding issue resolved if taxpayers had to provide their birth certificate to the funds, but many taxpayers can”t find copies of their birth certificates. Maybe a letter from SS would suffice.2007-12-16 10:05, By: dlzallestaxes, IP: [141.151.71.207]

L2: 72t paperworkdlz,
I really think Vanguard”s reasons are not DOB (age) related because they do not hesitate toapply the many other age dependent coding variations on the 1099R, such as whether distributions are early or not, or on a 5498 if there is an RMD requirement. And no IRA custodian knows or cares whether there is any tax basis for an IRA account.
Rather, I suspect the reason is related to more technical considerations such as approval of the calculation method and assumptions, doing due diligence in checking calculations, and of course getting into the mess caused by divorce related 72t disruptions. I can easily understand why a custodian would prefer to avoid these entanglements, but I think making an administrative charge for 72t accounts to cover extra overhead would make more sense than simply ignoring IRS coding recommendations. With the value added by their active involvement, they would probably save more clients from busting their SEPPs than they would cost them by making a modest administrative charge. 2007-12-16 19:58, By: Alan S., IP: [24.116.165.60]

L2: 72t paperworkGood morning Oliver:
As to your original question, here are two suggestions:
1. Since 72(t) is a tax issue and you indicated that”s all you are looking for, interview CPA”s in your area.Press them about their knowledge and expreience setting up SEPP (Substantially Equal Periodic Payment) Plans under IRS Code section 72(t) and 72(q). If their eyes glaze over at your questions, then you don”t have the right person and it”s time to leave.
2. Contact Bill Stecker, aka, “TheBadger,” and he can take care of your needs. Start by sending him an e-mail at wjstecker@wispertel.net
Good luck.
Jim2007-12-17 08:15, By: Jim, IP: [24.252.195.14]

L2: 72t paperworkAlan:
I agree that 1099-R coding could be improved and that Vanguard is following a procedure that suits them in the legal sense but that does not especially help their customers. That said, a lot of custodians are doing the very same thing today.
From my point of view, it looks as if the IRS could resolve this matter simply by issuing a statement that custodians should code SEPP 1099-Rs as “2” upon client request unless the custodian knows for a fact that this is not the case. They should also say that the result of this coding is between the tax payer and the IRS. It bothers me a bit that custodians have taken this approach. There are MANY examples of them taking our word for various items, yet this particular one is singled out for different treatment.
I am sure that the IRS would much prefer not to receive a blizzard of 5329s over this issue. Having to deal with these 5329s must be time consuming, inefficient, and expensive. We can only hope that this issue will be clarified by the IRS and that the legal implications of properly coding SEPP 1099Rs will be resolved. Unfortunately for many of us, our SEPPs are likely to be completed before that happens.
Ed2007-12-18 11:48, By: Ed_B, IP: [67.170.159.37]