Thank you for your using justanswer.
Customer: Any additional info needed?
I am truly sorry to tell you that may not put the $ back into the old IRA
You can start a new one........you can write off the expense of the attorney you used since there was taxable income from the suit
Customer: However sounds promising :)
Customer: Ok. So no hardship exclusion or now way to write a letter to irs ans ask for a waiver?
Customer: For example, is there a way to compromise where you pay the penalty/tax but are able to put the principle back in?
give me just a second to double check.........I don't THINK so.......but I would rather double check
Customer: It is a pretty substantial amount of money. Thanks..
Customer: For example, regulatory discretion or latitude afforded tot he agency to grant such a request.
Customer: Thx for dbl checking.
No problem.........there are 2 issues here
1-is the money you took out taxable? yes, because your IRA was "pre tax" $
2- is it subject to the 10% penalty.....(which is where the hardship may come int)
As to the penalty.......are you permantey disabled?
Customer: My wife thinks so from time to time. But no, not in the way you are asking.
I love a person with a sense of humor.....lol
So, if you have to pay tax on the distribution, lets look at this another way
The other way is to see what you can do to lower your total tax bill
Ex: do you itemize deductions?
Customer: I willhave subst legal fee deductions
Customer: Home interest
If you do, then this would be a REALLY good time to donate all the stuff that we all say we will get rid of some day.......I think for you, today's the day
You may pay your property taxes ahead
Customer: Good point.
Customer: One qucick follow up though
in other words, pay both 2013 & 2014
Customer: In other fed agencies there are ways to ask for waivers, etc to rules and reg
Customer: Id there no way to do thatwith irs
Customer: You may still lose, but is there any harm in asking proposing
tell me what you want to propose?
Customer: Before 2013 is over
Customer: Letter from taxpayer or tax preparer
Customer: Explaining situation
Customer: And propsoing that th irs allow the money togo back into ira
stating what....I'm trying to get a feel for what you really want
Customer: They irs allows you
Customer: 60 days
Customer: For a rollover to another ira
Customer: So this is like "a rollover"
Customer: In my tortured logic make any sense
Customer: The biggest hit is not the income tax
Customer: Or the penalty
Customer: Is the fact that i lose 25 years of still to be done deffered growth
Customer: Im in my 30s
You can work with the IRS on alot of fronts.........but when you're talking pre tax money........its a different game........and you have limits on the $ amount you can put into an IRA per year, and judging from what you said, I suspect you're wanting to contribute more than $5000
ahhhhhhhh I just read your post
Customer: Yes mid six figures
You need a financial advisor to tell you where to invest the money so that you DON'T lose the potential growth (although this won't help you immediately , since the money is going to be taxed) but it WILL help you in the future..
Customer: If i could have timed it right this would not have been a peoblem
Customer: take money out
Customer: pay legal expenses
Customer: receive settlement, roll momey into ira within 60 days
Customer: thats why it struck me as an idea to pitch this to the irs. Im rolling over the money
Customer: back into the ira
Customer: it just to took me 90 days
was your retirement that you received before or after tax? are they going to issue you a W2 or 1099?
Customer: The settlement or the ira withdrawal?
Customer: It also had taxes witheld
well that's good.............at least that withholding will help
you can drive yourself crazy with the "what if": game
Would I have advised you to take all of your money out of your IRA to fight your former employer
I would have told you to take out only what you needed
Customer: Oh, i did that.
Customer: Tere is still money in the ira
Customer: I tapped nondefrred assets first, but eventually had to dip in to the ira
Customer: Ok final ?
Customer: You don't think there is any value in sending the letter to irs?
well you can't change the fact that its taxable.........so now you look to damage control
Well, you'd be no worse off than you are now if they say no
but you have to understand that its a long shot at best
Customer: Does it make a difference if it is sent now or in 2014?
if it were me, would I do it? yes.......but I"m not called the bull dog in my office for nothing........because i never give up
yes........it makes a difference
Customer: Ok. Many thanks for your feedback.
Customer: That is all from me.
Please come back if you need more help.....I'll be happy to help you run damage control...
if you write the letter & win...will you let me know?
Customer: Yes. No prob.
IRS wants letters that are very brief and to the point
Customer: Yes 1 pager i think can do it.
Customer: Byeif background, issue, and proposed resolution.
Do you need another job........sounds like you'd make a GREAT tax pro
Customer: Ha ha. Thanks for the kind words. Now to bed and drafting the letter tomorrow.
Customer: Have a great day/night.
You too.....and best of luck to you