Scenario (not our client) – Repost from Email

L1: Scenario (not our client) – Repost from EmailClient took what he thought were 72(t) payments commencing in 2000. The IRS has notified him now that the 1099-R indicated a normal distribution (code 1) and the 5329 filed by the CPA (changing the distribution code to 2) has been ignored. The broker (one of the large houses) has no documentation authorizing the payments. The representative has since left the broker’s branch. The client is now in the position of having to back into a reasonable calculation for the payments with no cooperation from the broker. Based on the calculator on your web site, the payments received appear to be reasonable assuming an interest rate of 9.75%. Without documentation from the broker, does the client have a stance with the IRS? thanks for your help.2002-09-13 05:29, By: Mike, IP: [127.0.0.1]
L2: Scenario (not our client) – Repost from EmailThe message is clear, documentation is important and it should be in the hands of the IRA owner since that’s where the IRS expects to find it.Does he stand a chance? It all depends on how the IRS feels. The 9.75% rate seems a little high for a 2001 rate. The highest 120% AFR from our 2001 table is 7.01% – can you, or the client, justify the 9.75% rate?My guess is that you’ll have an uphill battle. I’m also assuming that the 2001 form 1099R will be coded in similiar fashion and will only increase the problem.Hopefully there will be additional answers to your question. Good luck :~}2002-09-13 05:43, By: Gfw, IP: [127.0.0.1]