IRS not happy about my 72t

[teejayevans]

So the IRS sent me letter indicating they want to apply a 10% penalty for an early distribution:
Yes I filled out form 5329 with code 02 indicating the exception as part of a SEPP, which they obviously ignored.

As anyone gone through this? If yes, how did you respond? Seems like they are ignoring their own forms? And other than sending them the form again (I submitted electronically so it could not have been lost), and quoting their own regulations Im at lost to what more they need?

[Blue Collar Guy]

Call them on the phone, speak to a live person, then send the form to their attention. If it sounds like your speaking to bozo the clown, hang up and get another agent, if they understand you, send the form to them .

[Big_Hitter]

Quote:

Originally Posted by Blue Collar Guy Call them on the phone, speak to a live person, then send the form to their attention. If it sounds like your speaking to bozo the clown, hang up and get another agent, if they understand you, send the form to them .

it takes hours to speak to a live person; my recommendation would be to just mail back the forms you signed. have you run this by your accountant?

[Tom57]

The same IRS thing about 72T (SEPP) happened to me about 7 years ago. The Vanguard tax department was very helpful in explaining what the IRS really wanted. I wrote the IRS a three page letter with several pages of attachments and after 2 months, the IRS wrote me a letter saying everything I originally filed was OK and they have no issues with me.

My wife's initial reaction to the IRS letter was to tell them they were stupid, wrong and dressed funny. Try very hard to not be angry with the IRS and send them an unemotional and factual letter to explain your situation with plenty of backup documents. There is a good chance the letter was generated by the IRS computer with no human review. Remember Congress makes the complicated tax laws the IRS enforces.

Good luck.

[teejayevans]

Quote:

Originally Posted by Big_Hitter it takes hours to speak to a live person; my recommendation would be to just mail back the forms you signed. have you run this by your accountant?

I don't have an accountant.

[sengsational]

When the IRS was wrong and sent me a letter, I called and talked to someone. It only took a few minutes to get through.

I explained why I thought they were wrong (just the facts, no attitude, of course) and the very nice person gave me specific instructions for what to do.

The bottom line was that I should simply point out why I disagreed.

Quote:

June 13, 2017 Internal Revenue Service Card Services P.O. Box 8802 Kansas City, MO, 64999-0010 Ref: Notice -----, Caller ID ----- I am writing to report a problem with the referenced notice; I don't agree with the changes. On 6/13 at approximately 11:30 AM, I spoke with Ms ------- (----------) and was advised to send this letter because she could not explain why the amount from the submitted 1040X, line 11, column B did not agree with the corresponding value reflected in your billing system. Per the 1040X submitted, decrease in tax is $---, but the letter sent reflects a decrease of only $---, a number which I believe is in error. Please make this correction. This should allow for a zero balance on the account. I will assume you agree with the information in this letter unless advised otherwise. Thanks.

[teejayevans]

Quote:

Originally Posted by Tom57 The same IRS thing about 72T (SEPP) happened to me about 7 years ago. The Vanguard tax department was very helpful in explaining what the IRS really wanted. I wrote the IRS a three page letter with several pages of attachments and after 2 months, the IRS wrote me a letter saying everything I originally filed was OK and they have no issues with me. My wife's initial reaction to the IRS letter was to tell them they were stupid, wrong and dressed funny. Try very hard to not be angry with the IRS and send them an unemotional and factual letter to explain your situation with plenty of backup documents. There is a good chance the letter was generated by the IRS computer with no human review. Remember Congress makes the complicated tax laws the IRS enforces. Good luck.

My first reaction was the same as your wife's.

I called VG , they weren't very helpful, told me to resubmit 5329.
Do you remember documents, attachments you sent them? Any help would be appreciated, thx

[frayne]

I went through the same thing about eight years ago. I simply sent them all the documentation on withdrawals and a cover letter explaining how the 72T withdrawal amount was calculated. They sent me back a letter saying there was no exception and I was in the clear. Just to cover my butt I stuck with the same withdrawal amount for about two years after the 72T time frame could have been considered satisfied.

My advice is to keep the correspondence professional and remember you are dealing with a government agency where people are just trying to do their jobs. It's not personal, just a business type negotiation. Good luck.

[pb4uski]

Quote:

Originally Posted by teejayevans So the IRS sent me letter indicating they want to apply a 10% penalty for an early distribution: Yes I filled out form 5329 with code 02 indicating the exception as part of a SEPP, which they obviously ignored. As anyone gone through this? If yes, how did you respond? Seems like they are ignoring their own forms? And other than sending them the form again (I submitted electronically so it could not have been lost), and quoting their own regulations Im at lost to what more they need?

I have never gone through this but have had other IRS issues. I think you just need to send them a letter explaining why the 10% penalty does not apply along with any other documentation that you have along with the Form 5329 that you filed. IOW, take them step by step with documentation through the reasoning of why the penalty does not apply and what did was within the SEPP exception.

[teejayevans]

I should mention it was a CP2000 notice, ie computer generated.

[Jerry1]

Quote:

Originally Posted by Tom57 send them an unemotional and factual letter to explain your situation with plenty of backup documents.

^^This^^

All you can do is keep talking. Also, this time of year, getting someone on the phone will not be that long of a wait.

But the most important thing is that when they call you and tell you they're going to throw you in jail if you don't pay your tax bill using gift cards you hang up.

[Blue Collar Guy]

Quote:

Originally Posted by Jerry1 ^^This^^ the most important thing is that when they call you and tell you they're going to throw you in jail if you don't pay your tax bill using gift cards you hang up.

[Scrapr]

Quote:

Originally Posted by Jerry1 ^^This^^ All you can do is keep talking. Also, this time of year, getting someone on the phone will not be that long of a wait. But the most important thing is that when they call you and tell you they're going to throw you in jail if you don't pay your tax bill using gift cards you hang up.

should I let them log onto my computer to fix my account?

[RobLJ]

Quote:

Originally Posted by Scrapr should I let them log onto my computer to fix my account?

Only if they are Nigerian IRS Princes who want you to float them their inherited tax rebate.