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socrateaser
socrateaser, Lawyer
Category: Tax
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Experience:  Retired (mostly)
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I retired from my employer on Jan. 1, 2013. I was a participant

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I retired from my employer on Jan. 1, 2013. I was a participant in a defined pension fund and a 401K fund. I took a lump sum distribution from the defined pension fund and rolled it and the 401K money into an IRA. I have paid no taxes on any of this money.
I am working for another company but my previous employer is interested in hiring me back. I don't want to put any of the money in jeopardy of tax deferment or put the companies defined pension fund in jeopardy.
Am I free to go back to my previous employer that I took the lump sum option from?

Hello,

 

The only time that this would become a problem is if the IRS were to determine that your former employment termination was intended for the sole purpose of obtaining a distribution of your retirement benefits, and that it was accomplished with the assistance of your employer. That would be tax evasion, in violation of IRC 7201. However, if that wasn't your intent, then there is no tax evasion.

 

Moreover, as long as the funds remain in an IRA, you have not actually evaded any tax, so once again, no evasion would occur.

 

I don't see any problem with your return to your former employer.


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