Disability and busting 72t

L1: Disability and busting 72tThe Social Security Administration just ruled me totally disabled. I am 57. I started my SEEP in 1998 when I was 52. I withdrew extra monies from my IRA and had to pay the penilty. Question 1. Now disabled do the rules of 72t still apply to me?. (Can I quit it or can I draw out extra with penilty?)Question 2. Can I file ammended returns to get back that penilty?Regards,Larry2002-08-16 18:08, By: Larry Bucknum, IP: [127.0.0.1]
L2: Disability and busting 72tYou actually pose a variety of questions that need answering first:1. As of what effective date has the SSA declared you disabled?2. Also potentially, does a doctor state in writing at an earlier date & it has just taken a while for the SSA to catch up?3. Irrespective of 1 & 2 above, do you meet the IRS definition of disability as “unable to engage in any substantial gainful activity…which can be expected to result in death or to be long-continued…”?Lets assume that you can answer all three questions, particularly #3 and fix a date certain on which the disability commenced.From that date forward, you can do whatever you want with respect to your IRAs and totally ignore 72(t)(4); e.g. the SEPP rule.Further, to the extent that your disabilty can be proven to affirmatively commenced at some earlier date and between that date & now you took extra distributions on which you paid the 10% penalty, then yes (at least for 2000 & 2001) you can file amended returns to:1. recapture the 10% penalty paid plus interest to you.2. Amend your filing status to disabled & potentially protect some disability income.TheBadgerwjstecker@wispertel.net2002-08-17 15:30, By: TheBadger, IP: [127.0.0.1]

L2: Disability and busting 72tThanks for the info Badger,1. The Administrative Law Judge of the SSA was who ruled me disabled. He set the onset date as October 1, 1997. 2. He used the SSA sections 216(i) and 223 to determine benefits.3. He says I am under a disability as defined in the SSA(20 CFR 404.1520(f))4. My doctors supplied information on my conditions. It included two cardiologists, one doctor for my back as well as other doctors for lessor problems.5. I applied for disability October 2000. I was declared disabled July 2002. The onset date is October 1997.6. I paid penalties to the IRS for 72t violations in 1998, 1999, and 2000. 7. Does the IRS have any excetpions on the three year back limitation on ammended returns? If the SSA had declared me disabled when I applied, I would not have a problem getting 1998 penalties.Badger,I hope this answers your questions.Regards,Larry2002-08-17 23:17, By: Larry Bucknum, IP: [127.0.0.1]

L2: Disability and busting 72tHello Larry:IRC 6511 basically says you have up to three years from when the return was filed & taxes paid. Therefore, your 1999 taxes where due & deemed paid on 4/15/00; roughly 2 years 4 months ago. Therefore, you can clearly amend your 1999, 2000 & 2001 returns.1998 under almost all circumstances is closed & can not be amended; however, you can call the IRS and see if they will grant an exception.TheBadgerwjstecker@wispertel.net2002-08-18 09:59, By: TheBadger, IP: [127.0.0.1]