SEPP 72-T PARTIAL TRANSFERS DISALLOWED BY IRS IN PLR 201323045
L1: SEPP 72-T PARTIAL TRANSFERS DISALLOWED BY IRS IN PLR 201323045The IRS just ruled against PARTIAL TRANSFERS of SEPP 72-T funds from one financial institution to another in PLR 201323045.
The case involved a taxpayer who tried to transfer his entire SEPP 72-T IRA when his broker changed firms, but the new firm would not accept a REIT investment. The IRS successfully argued that this was a “modification”. Hopefully someone can get to a Congressman or Nina Olson, IRS National Taxpayer Advocate to get legislation to reverse this stupidity.2013-06-14 14:19, By: dlzallestaxes, IP: [22.214.171.124]
L2: SEPP 72-T PARTIAL TRANSFERS DISALLOWED BY IRS IN PLR 201323045DLZ… Thanks for the post.
Here is a link to the PLRhttp://www.irs.gov/pub/irs-wd/1323045.pdf
In addition to the partial transfer, the custodian/financial advisor also appear to have changed the amount of the distributions.
If nothing more, this PLR amplifies the fact that if you have a SEPP, you need to deal with knowledgeable people.
2013-06-14 14:51, By: Gfw, IP: [126.96.36.199]
L3: SEPP 72-T PARTIAL TRANSFERS DISALLOWED BY IRS IN PLR 201323045My reading of the ruling indicates that the “monthly distributions” were changed, but the total annual distribution was the same after adjusting accordingly in the same calendar year.
If this is also part of the ruling, then major changes have to be made in our answers in many situations.2013-06-14 15:00, By: dlzallestaxes, IP: [188.8.131.52]
L4: SEPP 72-T PARTIAL TRANSFERS DISALLOWED BY IRS IN PLR 201323045The first time that I read the PLR, I also missed it, but paragraph 5 on page 2…
Taxpayer A represents that beginning in February 20 ,after Amount 3 was transferred to IRA E, that the monthly distributions were re-established with Company D. However, rather than continue with the same gross monthly distribution of Amount 1, Company D erroneously changed the gross monthly distribution to Amount 4 which was the net monthly distribution amount which Taxpayer A had been receiving under IRA B. As aresult, the total yearly IRA distribution was less than what had been taken out under theoriginal distribution plan. On Date 2, corrective distributions were made from IRA E to Taxpayer A to match the total yearly distributions Taxpayer A was receiving under IRA B. During this time no distributions were made from IRA B.
It would have been nice if they had included teh dates, but the way that I read it is the corrective distribution was not made in the same year as the wrong distributions were made.2013-06-14 15:17, By: Gfw, IP: [184.108.40.206]
L5: SEPP 72-T PARTIAL TRANSFERS DISALLOWED BY IRS IN PLR 201323045It would have been best if they at least indicated if Date 2 were in the same calendar year as Date 1. I assumed that they were within the same calendar year, while you assumed that Date 2 was in the following year. I do not know how/when we will ever know, even though it is critical to the situation.2013-06-14 15:54, By: dlzallestaxes, IP: [220.127.116.11]