PLR 200925044 – Partial Transfers
L1: PLR 200925044 – Partial TransfersDenise Appleby was kind enough to send me a copy of an article that she posted on her web site at http://www.retirementdictionary.com
The IRS is at it again.PLR 200925044 seems to reinforce the IRS position that a SEPP plan can’t make a partial transfer.While they appear to be saying that you can’t do partial transfers, I do believe that the problem that occurred was not caused by thefirst partial transfer, but by the 2nd transfer that resulted in commingled fundswhich is clearly not allowed.
The PLR… http://www.irs.gov/pub/irs-wd/0925044.pdf
The article by Denise…http://www.retirementdictionary.com/news/transfer-results-modification-sepp-plr2009250442009-06-26 19:18, By: Gfw, IP: [126.96.36.199]
L2: PLR 200925044 – Partial TransfersI unfortunately concur with the IRS (I hate it when I have to do that). The issue to me is not the partial transfer from IRA Xto IRA Z; it is the comingling of IRA Y (not part of the original SEPP plan) into IRA Z that therefore destroys the opening balance integrity of the SEPP plan.
I would still hold that had the taxpayer simply transferred a portion of IRA X to IRA Z and had never involved IRA Y, everything would be fine. The IRS can write Revenue Rulings until they are blue in the face. However a taxpayer’s right to perfom rollovers and trustee-to-trustee transfers come from a higher authority; Congress.
[email protected] 20:30, By: TheBadger, IP: [188.8.131.52]
L3: PLR 200925044 – Partial TransfersI think this is a pretty sloppy letter ruling by the IRS:
1) When stating the 72t distributions were taken from IRA X we are left to assume that means that IRA Y was not comtemplated in the initial account balance. Y was probably not included, but they should have clearly stated as much. Then we would have known that their problem was the partial transfer, not the inclusion of Y. This alsoraises the questionthat in their mind, inclusion of Y in the account balance while only taking distributions from X was not even an option.
2) They ruled that “the transferfromXto Z” (not X plus Y) busted the plan without clarifying whether this was due to one ormore of the following:
a) X being not all of X
b) Inclusion of Y with part of X
c) Z being considered “another retirement plan”
I am left with the impression that this ruling raises more questions about partial transfers, EVEN if Y had not been included to enhance the balance.
It also makes no reference to any letter rulings, just to 89-25 and 2002-62 which in themselves can be interpreted with some degree of variation.
??????????? ????????????2009-06-27 01:06, By: Alan S., IP: [184.108.40.206]