Changing frequency of payments

L1: Changing frequency of paymentsQuestion:
Assume I am taking distributions monthly for this tax year and I wish to change the payments in 2004 to annual distributions, is there anything in the IRC code prohibits this? I am not recalulating2003-12-16 11:14, By: Bill, IP: [127.0.0.1]

L2: Changing frequency of paymentsHello Bill:
IMHO, you are fine; the IRS has provence in the area of “intra-year” distribution frequency.
TheBadger
wjstecker@wispertel.net
2003-12-16 12:00, By: TheBadger, IP: [127.0.0.1]

L2: Changing frequency of paymentsWhat is the IRC code that allows the change of freqeency?2003-12-16 15:01, By: Bill, IP: [127.0.0.1]

L2: Changing frequency of paymentsPerhaps a better question is “What is the code section that says you can”t?”
IRS Notice 89-25 and Rev. Rul. 2002-62 only concernthemselves withthe amount of the annual distribution. Even the 1099 formdoesn”t ask forwhen the distributons occured, merely the amount paidduring the calendar year.
2003-12-16 15:05, By: Gfw, IP: [127.0.0.1]

L2: Changing frequency of paymentsThis might be a good opportunity to discuss, at least conceptually, how to interpret the Internal Revenue Code (including all subsidiary authorities such as: ruling, procedures, notices, etc.). Congress, and either through implicit or explicit transfer of authority to the IRS, have all the power, time and direction to “create law”. Although technically not the same thing, the concept of “Adhesion” applies to interpreting the IRC; meaning that errors; ambiguities, conflicts generally fall in favor of the taxpayer, just as these same issues are ruled in favor of thepolicyholder ininsurance contracts. Therefore, we can create some rules:
1. When the tax law is clear and straightforward, then one had best follow it.
2. When the tax law is clear, but how to interpret it or apply it to one”s paticular facts & circumstances is not clear, then one had better ask some questions.
3. When the tax law is unclear, (and this is a generalization) one is generally free to interpret to the taxpayer”s benefit.
4. When there is no law, e.g. a void in technical or tactical issues, that area belongs to the taxpayer, not the IRS.
Example on point — the IRS has had more than ample opportunity to rule on distribution frequency of SEPP distributions. Forgeting for the moment whether or not the IRS would have providence or authority to do so (which I personally think they do not), the IRS has stuck to “not less frequently than annually” direct from the Code and has repeatedly chosen not to rule/interfere on the subject of “intra-year frequency”.This then leaves a void on the subject — e.g. there is no law & further, there is no place to go to even look for some indirect guidance; therefore, this specific issue is left to the taxpayer, and exclusively the taxpayer until such time as Congress or the IRS speakson the issue.
Conclusion — do whatever you want to do when it comes to intra-year distributions; just make sure that at the end of the year, the sum of the distributions does add up to the correct total.
TheBadger
wjstecker@wispertel.net

2003-12-16 15:33, By: TheBadger, IP: [127.0.0.1]