IRS Audit of SEPP Plans

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L1: IRS Audit of SEPP PlansSomething may be afoot regarding audits of SEPP plans. I say something only because my sample size is a total of three clients (but that’s a lot more than zero) all of whom have what appear to be identical circumstances as follows:
1. Client has two IRAs, A & B.2. Client launches SEPP plan on IRA A only.3. Client takes a distribution from IRA B for different reasons.4. Client receives 1099R on IRA A with any reason code other than 2″.5. Client receives 1099R on IRA B.6. Client dutifully files one or more Form 5329 as is appropriate.
This fact set applies, so far, to tax years 2001 and 2002. All three clients receive audit letters from the correspondence audit department of the IRS located in Cincinnati; all from the same fictitious۝ supervisor always asking that the taxpayer submit official documentation۝ supporting the taxpayer’s distributions.
Of course, with respect to SEPP plans, there is no official documentation۝; there is only the documentation the taxpayer has essentially self-generated in support of the SEPP plan. As these audits conclude, I’ll keep you posted as to what happens.
Is something afoot here? Did some IRS programmer make a few lines of code change in the great IRS audit computer in the sky? My guess is yes. Just another reason to have all of your documentation lined up with a bow on it. I think they are coming.
TheBadger
wjstecker@wispertel.net
2005-03-18 10:45, By: TheBadger, IP: [66.250.23.21]

L2: IRS Audit of SEPP PlansWhy do you call the supervisor fictitious۝? 2005-03-19 07:35, By: daddy0, IP: [24.44.124.155]

L2: IRS Audit of SEPP PlansI call anyone “ficticious” if after a 1/2 dozen or so phone calls, I get no response.
Oh, by the way, the count is now up to 4.
TheBadger
wjstecker@wispertel.net
2005-03-22 14:10, By: TheBadger, IP: [66.250.23.21]

L2: IRS Audit of SEPP PlansBadger:
Any updates on the audits?
Mike2005-12-10 07:05, By: daddy0, IP: [69.120.56.189]