Tax Deferred Annuities & Ruling 2002-62

L1: Tax Deferred Annuities & Ruling 2002-62The article on this website interprets PLR 200313016 as extending 2002-62 to people starting SEPP plans with non-qualified annuities. I have written to my insurance company and they also believe that this is the case. HOWEVER, I have emailed the IRS from their website and they say otherwise. My correspondence with them is as follows:
NOTE: Our response to your tax law question appears below. If you have a follow-up question or another general tax law question, please return to our web site at: (http://www.irs.gov/help/page/0,,id=13162,00.html) to submit it. Please do not use your “reply” button to respond to this message. More helpful information is provided at the end of this message. Your Question Was:This question is concerned with STARTING to take a series of substantially equal periodic payments from an individually purchased non-qualified tax deferred annuity. Revenue Ruling 2002-62 makes NO reference to individually purchased non-qualified annuities or 72 (q). When starting to take SEPP s from individually purchased non-qualified tax deferred annuity is one required to follow the rules outlined in 200-62 ( using 120% of the mid-term rate rather than the long term rate for example) or can one use the old rules (Notice 89-25 and the PLRs that preceded 2002-62 )? The Answer To Your Question Is:You can choice to use the new rules or the old rules when you are using the exception,there is nothing that states you must one versus the other.IRS forms and publications may be accessed on our web site at the following address: http://www.irs.gov/forms_pubs/index.html or ordered through our toll-free forms line at:
Now I am totally confused. Can I safely follow the advice from the IRS & use the old rules without worrying that they will come back some day and bite me in the butt? Are they in any way bound by the advice they give? I know I can ask for a PLR, but I am a low rate taxpayer and really do not want to pay for a finding which they should make clear on their own. Does anyone know of any PLR’sissued recentlythat might answer my question?2003-07-11 13:55, By: Beachbum, IP: [127.0.0.1]

L2: Tax Deferred Annuities & Ruling 2002-62You can only rely on what the IRS states if you have requested and receive your own PLR. There are two areas – one that deals with 72(t) and another that deals with 72(q).
I take the position (until I see something more formal from the IRS than an email) that the new rules have been extended to 72(q) SEPPs. The choice however, is yours. Regardless of how the 1099 is coded, you can always file form 5329 to claim the exemption. Depending on the amount of money that you are placing in the SEPP, your own PLR (which could take time) may be your best course. Check with Bill (theBadger), he may have some other thoughts.
2003-07-11 14:16, By: Gfw, IP: [127.0.0.1]