Breaking 72T after age 59 1/2 but before 5 years?

L1: Breaking 72T after age 59 1/2 but before 5 years?A friend of mine started72T distributions at age 57, somustcontinue withSEP for five years (age 62). Duringa recent conversation, he mentioned that hisFinancial Advisor told him that he could probably break it (withdraw extra money) now thathe is beyond 591/2 because the IRS never checks anyone once they”ve reached the age of 59 1/2. Anyone want to weigh in on this?? I told him he should lose the Financial Advisor and get better advice.2006-10-20 20:10, By: Pagestreet, IP: [71.104.51.140]
L2: Breaking 72T after age 59 1/2 but before 5 years?Hello Pagestreet:
If your friend busts his/her SEPP plan now; he or she will owe the 10% surtax plus interest on all pre-59 1/2 distributions. Needless-to-say, I do not advocate playing the audit lottery. Furthermore, to knowingly do so will further incur fraud penalties. I think it is time for your friend to seek out a new investment advisor.
TheBadger
wjstecker@wispertel.net
2006-10-20 22:18, By: TheBadger, IP: [72.42.67.131]

L2: Breaking 72T after age 59 1/2 but before 5 years?You might have your friend refer the advisor to the Inst for Form 1099R, p R-10. There are specific directives here for the IRA custodian to code the distribution as early (Code 1) EVEN THOUGH the taxpayer is beyond age 59.5, if he has not completed the 5 year requirement. This is a giant red flag to the IRS. Even then, the IRS is not always diligent in reacting to inconsistencies between the tax return and the info returns, during which time the interest penalties continue to accumulate. Not a formula for sleeping soundly.2006-10-21 18:35, By: Alan S., IP: [24.116.66.98]

L2: Breaking 72T after age 59 1/2 but before 5 years?Hello Pagestreet:
You are absolutely correct about firing the current advisor and looking for someone more reliable and honest. Like TheBadger stated, playing “audit roulett” with the IRS is not a good game. In fact, it is a 100% losing game. While you don”t know if your friend will ever be subject to an audit, at the same time you don”t know for sure that he/she will NEVER be subject to an audit. (I hope that logic string makes sense.)
If this “advisor” will advise someone to do something illegal … which sounds like what”s happening … then how can you rely on the other advise given? It”s idiots like this “advisor” that make life totally miserable for the legitimate advisors who are trying to do the right thing for our clients.
Jim2006-10-23 09:16, By: Jim, IP: [70.184.2.72]

L2: Breaking 72T after age 59 1/2 but before 5 years?Thanks all for your input!! I agree completely – it wouldn”t make sense to takeany chances and couldturnout to bea very costly mistake. This is a very informativesite for SEPP related questions.Keep up the great work!!2006-10-23 18:22, By: Pagestreet, IP: [71.104.51.140]