Busted 72T

L1: Busted 72TUnfortunately, there is no case law and no PLR’s on the subject of busted SEPPs other than the obvious; if you voluntarily/prematurely terminate your SEPP program you will owe the 10% surtax and intervening statutory interest. However, what if a taxpayer juduciously starts a SEPP and the underlying assets literally exhaust themselves prematurely? The answer is unknown; however, there are concepts & theories that swing both ways as to whether the 10% surtax & interest would be due. Since you are contemplating termination of your SEPP anyway at a cost approaching $20,000, I would suggest you look toward a potentially cheaper path; e.g. one of continuing the SEPP, allowing the IRA to exhaust itself prematurely but also attempting to acquire a favorable PLR for yourself that protects you from the penalty in some future year.If you would like to discuss this concept further, feel free to drop me a note @ wjstecker@wispertel.netTheBadger 2002-03-02 09:40, By: TheBadger, IP: [127.0.0.1]