What is the impact of Internal Revenue Bulletin: 2004-9, Notice 2004-15 on Non-Qualified Tax-Deferred Annuities?
A. On March 1, 2004 in Internal Revenue Bulletin: 2004-9, Notice 2004-15. The IRS appears to have extended Revenue Ruling 2002-62 to non-qualified annuities. If correct, the flexibility of 89-25 and the various PLRs leading up to Revenue Ruling 2002-62 are now gone – for all plans. The following segments were extracted from the Notice… “The IRS and Treasury believe that because these provisions were enacted for the same purpose it is appropriate to apply the same methods to determine whether a distribution is part of a series of substantially equal periodic payments. Therefore, taxpayers may use one of the methods set forth in Notice 89-25, as modified by Revenue Ruling 2002-62, to determine whether a distribution from a non-qualified annuity contract is part of a series of substantially equal periodic payments under § 72(q)(2)(D). First, an individual is not subject to the § 72(t)(1) additional tax if (i) the payments are not substantially equal because the assets in the individuals
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