New PLR disallows partial transfers

L1: New PLR disallows partial transfers IRS Letter Ruling 200720023, dated May 23, 2007, says,that a partialtransfer of funds from an IRA which was funding a 72(t) SOSEPP distribution to a second IRA:
“… did constitute a “Modification to a series of substantially equal periodic payments” as described in Code, section 72(t)(4). As a result, such modification resulted in the imposition ofa 10% additional tax pursuant to Code section 71(t)(1).”
Sorry guys. No more partial transfers.2007-05-22 12:34, By: Paul2, IP: [12.42.50.52]

L2: New PLR disallows partial transfersInteresting. But I don”t see where the PLR clarifies whether IRA Y had an existing balance in it when a transfer was made from IRA X. If Y did have aprior balance, then modification is obvious. But if Y had no balance, then we could be going back to the drawing board.2007-05-22 14:47, By: Alan S., IP: [24.116.66.98]

L2: New PLR disallows partial transfersI too read this PLR this morning & what is going on is confusing & unclear. I suspect strongly that we do not see all of the facts in the published PLR and that somehow this taxpayer destroyed/violated the integrity of the SEPP IRA. I will attempt to get clarification from the IRS but it may take a while.
TheBadger
wjstecker@wispertel.net

2007-05-22 15:18, By: TheBadger, IP: [72.42.67.29]

L2: New PLR disallows partial transfersReviewing the PLR again more closely, it does appear that IRA Y had a Date 1 value, which I assume is not -0-. That was prior to Date 2 when the transfer was made from SEPP IRA X to Y. Therefore, it certainly appears that the transfer was made from a SEPP universe IRA account to an existing IRA with a balance, therefore busting the SEPP. This would be as expected all along, and does not suggest that a transfer could not be made to a new -0- balance IRA account while maintaining the validity of the SEPP.2007-05-29 10:31, By: Alan S., IP: [24.116.66.98]

L2: New PLR disallows partial transfersHello Alan:
I too have been re-re-rereading thisw PLR because on its face, it is awful.
I do not see any reference to an opening balance in IRA Y in the version of the PLR I am reading. However, it is possible that we are reading from two different sources. Can you clarify?
TheBadger
wjstecker@wispertel.net

2007-05-30 06:45, By: TheBadger, IP: [72.42.66.87]

L2: New PLR disallows partial transfersBill:
Can you call the guy / gal at the IRS who wrote the opinion / PLR and ask them to clarify their wording?
Jim2007-05-30 07:25, By: Jim, IP: [24.252.195.14]

L2: New PLR disallows partial transfersHello Jim:
I have already spoken with Ms. Sloan, the unit manager of the area that issued the PLR and basically got nowhere.
As a result, I have drafted and sent a General Information Letter request to that division (mailed yesterday). A GIL request is a request for the Service to issue more information on a specific topic that is not binding on the IRS but instead deals with a subject from a theoretical perspective excluding any specific taxpayer facts & circumstances.
If the IRS is willing to issue a GIL (they do not have to) it will take a while; likely several months but one way or another this should open some dialogue on the subject to get clearer answers.
TheBadger
wjstecker@wispertel.net

2007-05-30 07:37, By: TheBadger, IP: [72.42.66.87]

L2: New PLR disallows partial transfersBill, my apologies.
When reading the PLR on the IRS website, I neglected to note the Dates 1,2 etc were started over in different years instead of being in order from Day 1. Simply missed the 2005 year as being the date showing IRA Y value instead of 1999 prior to the first transfer. Back in limbo, I guess.
2007-05-30 12:51, By: Alan S., IP: [24.116.66.98]

L2: New PLR disallows partial transfersAny new news on this yet???2007-06-06 18:02, By: JAG, IP: [70.121.108.105]

L2: New PLR disallows partial transfersIf the first transfer would have been for the full amount, do you think it would have changed the ruling?2007-06-15 14:31, By: KDM, IP: [12.104.244.6]