Change Possible?

L1: Change Possible?
I want to change from the fixed amortization to the RMD method as soon as possible. My CPA advised that I could not change until Jan 2003 because my monthly withdrawals through September 2002 already exceed the amount that the RMD method would allow for 2002. Using the September 2002 IRA account balance and my age (58 this December), the RMD monthly withdrawal would be $1,210/month instead of $11,000/month under the fixed amortization method. My 2 questions are:

Can I legally change to the RMD method effective November 2002 based on the account balance as of September 30, 2002? That would be $1,210 for November and December 2002.
2. Could I change from a monthly withdrawal to an annual withdrawal beginning in 2003? Iwouldprefer to make one withdrawal in December 2003 based on the ending November 2003 account balance and use the same strategy for 2004 withdrawals. My last required withdrawal would be February 2005 as my first withdrawal was made February 2000. I will be 60 years old December 2004.2002-10-26 09:11, By: dar, IP: [127.0.0.1]

L2: Change Possible?Hello Dar:
In general; your CPA is incorrect. The ruling is explicit in the requirements to convert to the RMD method: (1) Your old/current method must the fixed amortization or annuity method; (2) Your old/current method satisfied 72(t)(2)(A)(iv) meaning within the context of Notice 89-25 & presumably you do; (3) You started your old method in 2001 or earlier; THEN you are permitted to “CHANGE AT ANY TIME”.
The language of “change at any time” was very intentional in the ruling & implies future, immediate & to a certain extent past. As a result the answer to both of your questions is yes.
TheBadger
wjstecker@wispertel.net

2002-10-26 12:01, By: TheBadger, IP: [127.0.0.1]

L2: Change Possible?
I talked with Michael Rubin, the principal author of 2002-62, regarding a conversion to the RMD method this year. He said that I could not convert to the RMD until January 2003 and must continue with existing withdrawals this year. He said that I could change if I was making one annual withdrawal or had taken out less than the RMD method but since I was taking monthly withdrawals and they have exceeded the RMD method, I could not change until January 2003. I asked him if he was aware of this web site and he said – no he didn’t know about it. Has Michael been involved with your Service contacts? The Service representatives seem to be very confused regarding what 2002-62 really implies as other representatives at the Service have given me much different answers.
I believe that you are correct with your interpretations but I remain hesitant to make the conversion if I risk the 10% penalty.2002-10-30 20:30, By: dar, IP: [127.0.0.1]