intentionaly busting plan

L1: intentionaly busting planI have 3 separate IRA’s .In 2001 I began SEPP withdrawals of 20k from one and 40k from the other(I am 52 yrs old). I dont draw anything from the 3rd. The IRA that I draw 40k from has dividends/interest of over 40k pr year so my principal isnt touched. The other IRA which I draw 20k from is made up of stock. I have not taken my annual 20k distribution in 2002 from IRA 2 and since I am back working and the value of the IRA has diminished I am planning on voluntarily busting the plan and paying the 2k penalty. My questions are do you see any problem with this and secondly how do I go about paying the penalty?.Do I just wait till I hear from the IRS or is there some form I need to fill out to turn myself in?Thanks and great site2002-07-17 20:31, By: ed, IP: [127.0.0.1]
L2: intentionaly busting planHello Ed:People intentionally bust SEPP plans all the time. You will owe the $2,000 surtax as well as a fiarly modest amount of interest; approximately 7% on the $2,000 per annum unitl paid. In your case, the $2k penalty was due 4/15/02; therefore, if you file an amended return; say by 8/15/02, you will owe an additional $50 in interest or so. This is all done on Form 5329.TheBadger2002-07-18 07:20, By: TheBadger, IP: [127.0.0.1]