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Frequently Asked Questions, FAQ


Q. 10% Penalty: Does anyone know of any actual cases where someone accidentally broke their 72t and were caught by the IRS? What were the actual penalty percentages? Do they ever give someone a break and let them fix it if possible? Do they ever waive the penalties and interest? If someone was taking 72t withdrawals for 7 years and then switched to the MD method and calculated wrong and withdrew $100 too much would the IRS actually charge $100,000 if that was what the interest and penalties would come to?
Q. 5-Year Rule: Assuming the 5-Year rule, when can payments be modified?
Q. Account Balance: Can I vary the plan payments by my account balance?
Q. Account Balance: Do All IRA Accounts have to be combined to determine the amount of the distribution?
Q. Account Balance: What account balance should be used?
Q. Account Balance: What if I run out of money?
Q. Account: Can a portion of an IRA account be excluded from the calculations?
Q. Accounts: I have a SEPP and have been re-employed and have earned income. Can I make a contribution to an IRA?
Q. Accounts: I have a SEPP that used one of my two IRA accounts, can I set up a second SEPP with the other account?
Q. Accounts: If I include more than one account, which accounts do I use to make the payments?
Q. After-Tax Contrbutions: How are my non-deductible contributions treated?
Q. Age 55 Exception: What is the Age 55 Exception to the 10% penalty?
Q. Age: How is my age calculated?
Q. Annuity: What about IRC Section 72(q) for Non-Qualified Tax-Deferred Annuities?
Q. Annuity: What is the impact of Internal Revenue Bulletin: 2004-9, Notice 2004-15 on Non-Qualified Tax-Deferred Annuities?
Q. BUST: How do I report a 'Busted' SEPP (2009 Tax Year)?
Q. Calculators: Are your Calculators Accurate?
Q. COLA: Can a Cost of Living Adjustment (COLA) be included?
Q. Death or Disability: What if I die or become disabled?
Q. Disability: What is the Definition of Disability for 72(t)?
Q. Distributions: Can distributions be made monthly?
Q. Divorce: If I get divorced and transfer a portion of the payments to my ex-spouse, will I loose the exemption from the 10% penalty tax?
Q. Documentation: Are there any IRS filing requirements?
Q. Documentation: What documentation should be maintained for a SEPP plan?
Q. Interest Rate: I have been searching for a definition of what exactly is the "federal mid-term rate" Can you tell me where this interest rate comes from?
Q. Interest Rate: What is the maximum interest rate that can be used?
Q. Mortality Table: Which Mortality Tables can be used?
Q. Payment Change: Once started, can I change the payment?
Q. Plan End: Once started, how long must I continue the plan?
Q. PLR: What is a Private Letter Ruling?
Q. Recalculate: Can I recalculate my Life Expectancy using the Amortization or Annuity Methods?
Q. Withholding: Is withholding mandatory?