whos fault?? (72t problems)

L1: whos fault?? (72t problems)badger–its me again. thought i would put the question on the site to hopefully help others. Are there any rulings that hold custodians at fault for miscalculating 72(t) distributions. And therefore allow participants to recalculate penalty free? thanks2002-08-09 12:50, By: cyron, IP: [127.0.0.1]
L2: whos fault?? (72t problems)It’s always the fault of the individual since an IRA is between an individual and the IRS.However, you could always attempt to sue the Trustee/Custodian for making the miscalculation, but then you would have to actually prove that there actually was a miscalculation.Remember, if the assumptions used were reasonable at the time implemented, then you have no case at all. 2002-08-09 13:35, By: Gfw, IP: [127.0.0.1]

L2: whos fault?? (72t problems)Actually, I have some rather bad news. There are no court cases & no rulings on point of which I am aware. However, there is a “related” general counsel memorandum (“GCM”) where several IRA owners were fraudulently induced to transfer their IRA moneys to a guy posing as a qualified trustee who of course was not and proceeded to steal all the money. Because, the guy was not a qualified trustee, all the transfers to the guy were treated as early distributions & therefore subject to regular federal income tax plus the 10% penalty. Further, some of the original IRA owners had sufficient funds to replinish the stolen money from other funds & in this case were seeking abeyance of the 60 day rollover rule in order to replinish the stolen IRA funds & therefore treat the original transfer to the thief as a “rollover” & therefore not have to pay the tax and 10% penalty.The IRS was in agreement with the taxpayers and was ready to grant a waiver of the 60 day rule and to cover itself filed a ruling request, essentially with itself, with the General Counsel’s office; thus the GCM. Admittedly, this ruling request was on a different issue; e.g. the 60 day rule, nonetheless, the GC ruled, reafffirming prior law, that a trustee (qualified or unqualified) is ALWAYS the agent of the IRA owner; therefore the actions of the proported trustee; although illegal on their face, was still the action of the IRA owner; therefore tough luck.Bottom line, everyone involved with an IRA: accountant, lawyer, CFP, trustee, custodian, etc. are all agents of the IRA owner & therefore any error on the part of any of the agents is essentially the error of the IRA owner.This is not to say that an agent can not be held responsible for its errors, of course it can; however, the IRS says that that process does not interplead or interfere with tax law; rather, instead, any error committed by an agent of the owner is strictly between the agent and the owner and therefore, the owner is free to seek redress in whatever manner he so chooses directly and only with the agent.TheBadgerP.S. In several other rulings, a taxpayer has made a claim in the facts and circumstances section of the ruling; something to the effect: “On the advice of my CPA/lawyer/CFP, I did XXX”. In each case, the IRS completely bypassed the “advice of counsel” issue and ruled exclusively on the factual merits of what had happened or been done to the taxpayer’s IRA. Further, the IRS refused to even enter into the discussion, at least within the ruling, on whether or not the taxpayer had received bad advice. Obviously, in these rulings the taxpayer, at least on the face of the rulings themselves, did receive bad advice; however, there was no recognition or countenance of that fact in the ruling. 2002-08-09 18:03, By: TheBadger, IP: [127.0.0.1]