Badger (or gfw)…..

L1: Badger (or gfw)…..Badger– This is truly excellent advice. Congruently, as part of a previous reply to Sonny you mention that to paraphrase: “8 out of the 12 PLRs were favorable”…to wit…”By: TheBadger Date: 4/20/2002 Subject: RE: Sonny’s comment…. Third, since the beginning of time on the whole issue of SEPPs there have been 12 PLRs issued on “annual recalculation” of which 8 have been favorable. Looking at the 8, 7 of the 8 have all had valuation dates of 12/31/XX. Only one, #2000-20063, had a valuation date other than 12/31/xx & this one had a valuation date of 4/30/xx. In this one PLR the taxpayer is measuring on 4/30/xx using annual recalculation and immediately after recalculation taking the full annual amount as a withdrawal. TheBadger”My question pertaining to the foregoing is if 8 of 12 were “favorable” then do you happen to know why the remaining 4 were rejected?I assume there must’ve been some major anomalies in those individual cases that would’ve kicked out the previously approved recalculation method for the other 8 cases.Also, since accuracy is so important in determining SEPP payouts, isn’t it a valid concern that the IRA administrator for instance could botch up the calculations effective 1/1/XX and therefore all subsequent years thereafter would be “penalized” even though the error was corrected sometime later? How then does one ensure that on 12/31/XX that the recalculations effecting payout on 1/1/XX are 100% correct? How “accurate” does accurate need to be in the eyes of the IRS?What you and gfw provide here is absolutely outstanding and greatly appreciated by all I’m sure.Thanks again.endgame 2002-04-21 22:23, By: endgame, IP: [127.0.0.1]
L2: Badger (or gfw)…..My question pertaining to the foregoing is if 8 of 12 were “favorable” then do you happen to know why the remaining 4 were rejected? I assume there must’ve been some major anomalies in those individual cases that would’ve kicked out the previously approved recalculation method for the other 8 cases.The four “recalculation” PLRs that where unfavorable all had a common flaw. Each of the 4 had some retroactive feature in them; e.g. the taxpayer had already done 3-4 years of a SEPP using a fixed methodology & now the taxpayer wanted to retrace their steps to the very beginning and overlay a recalculation methodology on top of or replacing the old methodology making corrective distributions for the prior years and usign the recalculation methodology going forward. Conversely, the 8 that were approved were all prospective or forward looking only.Also, since accuracy is so important in determining SEPP payouts, isn’t it a valid concern that the IRA administrator for instance could botch up the calculations effective 1/1/XX and therefore all subsequent years thereafter would be “penalized” even though the error was corrected sometime later?Rarely is an IRA administrator willing to take on the duty/liability of performing and by implication certifying the accuracy of annual SEPP computations; this is almost always the provence of the taxpayer only.How then does one ensure that on 12/31/XX that the recalculations effecting payout on 1/1/XX are 100% correct? How “accurate” does accurate need to be in the eyes of the IRS?You have heard the old saying about “measure twice, cut once”. Well, here I think the operative word is “thrice”. As a general rule, the IRS considers accurate to mean 100% accurate but for “di minimus” issues defined as less than one dollar. No one I know of has had their SEPP plan rejected for being off $42.88; but why take that kind of chance.What you and gfw provide here is absolutely outstanding and greatly appreciated by all I’m sure.Let’s be perfectly clear here. This is Gfw’s website, not mine. I just hang around to put my 2 cents in periodically.TheBadgerwjstecker@wispertel.net2002-04-22 08:31, By: TheBadger, IP: [127.0.0.1]