IRS “Busted SEPP” Rulings — Update

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L1: IRS “Busted SEPP” Rulings — UpdateI spoke with members of the “guidance committee” in the AGCs office this morning. They are adamant that that they will issue internal guidance no later than 10/31/02 & will at that time commence the rulings on all “busted SEPP” PLR requests in-house (now up to 25 or so).Unfortunately, they are playing their cards close to the vest & providing little advance information; therefore, there is no real intelligence to report today as to what the real content of their guidance will be.On the other hand, I am reasonably convinced, in that their message has remained the same over the last 2 months, that they really will rule, in some fashion in short order & at a minimum, will rule in time for taxpayers to take action before year’s end.TheBadgerwjstecker@wispertel.net2002-09-30 10:22, By: TheBadger, IP: [127.0.0.1]
L2: IRS "Busted SEPP" Rulings — UpI remain hopeful. My 72(t) started 2 years ago was about 7-8% of my total IRA. Now it is about 20-25%. I am screwed both for the long and short haultom2002-09-30 21:27, By: screwedincalif, IP: [127.0.0.1]

L2: IRS "Busted SEPP" Rulings — UpBadger: I assume that “internal guidance” is just that and does not yet equate to an official for public consumption ruling or in other words a new law affecting SEPPS going forward. Assumably as well, other rulings or law will be in effect after these particular PLR’s have been addressed and therefore by 12/31/02 affecting not only busted SEPPS but also other issues related to requirements/greater restrictions in which a new SEPP can even be set up? Is this interpretation correct that they’re tackling not only busted SEPPS but much more?Thx.endgame2002-09-30 23:21, By: endgame, IP: [127.0.0.1]

L2: IRS "Busted SEPP" Rulings — UpActually, the IRS faces a bit of a tough situation here. First, they need to decide internally as to what they think the right answers are. That’s what they are doing now and let’s say over the next month. In this regard they face two fundamental issues: one, what to do about existing taxpayers with busted or near-busted SEPPs; two, prospectively, what to do about the next taxpayer who wants to adopt a SEPP tomorrow.Issue #1 can theoretically be dealt with through internal guidance only; e.g. nothing ever published to the public, instead, the “new” law would be promlagated through the issuance of 10 – 20 new PLRs. This is no the preferred method to solving the problem but it may be the only reasonable method to solve this particular issue.Issue #2 can only be solved by issuing a new Notice or Revenue Ruling that overturns / supercedes Notice 89-25 and creates a new set of standards / rules for creating SEPPs in the future. As a result, I would suspect that that document will be a little slower in reaching the public.Hope I have answered your questions / comments.TheBadgerwjstecker@wispertel.net2002-10-01 07:59, By: TheBadger, IP: [127.0.0.1]