SEPP
When an IRA client decides they want to utilize the 72t option, is there any paperwork to be submitted up front to the IRS?
When an IRA client decides they want to utilize the 72t option, is there any paperwork to be submitted up front to the IRS?
Permalink Submitted by Alan Spross on Mon, 2010-07-26 18:22
No.
But the client should carefully document their calculations and make a copy of the on line or paper statement showing the initial account balance used for the IRA account or accounts. The IRS may never inquire about the plan or they could inquire many years later, probably up to 3 years after the plan ends. It is also recommended that the IRA custodian be informed of the plan. Custodians offer varying amounts of support, but most of them no longer provide the exception coding on the 1099R. Client will therefore probably have to file a 5329 to claim the SEPP exception.
Here is a link to a sample SEPP documentation form:
http://www.72t.net/72t/Sample/Form