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Is there ANY HOPE or help with an IRA early distribution ?

Dodge City, KS |

Son received early distribution of old Retire account he didn't remember. Was going to rollover, his then wife-to-be talked him to put check in her check account for safety until could get it done. Needless to say she refused to return over $75,000 an spent it all. They never got married and He has letters stating she was going to return his money to him and even has the checks that she wrote to him & by the time the bank opened her sister (worked at bank) would have already put stop payment on the checks every time. I had found on IRS site law on IRAs & said she IS responsible for taxes and to claim as income because she had sole control and spent the money and not him. Now they upgraded their site I can no longer access the bookmark or any of the info on this matter! Is there ANY hope?

The girlfriend was the sole Owner of the checking account.

Attorney Answers 1

Posted

This question was previously asked. Since your son took the distribution and put the funds into his account, the IRS will hold him responsible. Your son has a claim against his girlfriend. You need to contact a tax attorney or good CPA who can help with the IRS.

You can also call the IRS ombudsman for assistance.

The general advice above does not constitute an attorney-client relationship: you haven't hired me or my firm or given me confidential information by posting on this public forum, and my answer on this public forum does not constitute attorney-client advice. IRS Circular 230 Disclosure: In order to comply with requirements imposed by the Internal Revenue Service, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. While I am licensed to practice in New York and California, I do not actively practice in New York. Regardless, nothing said should be deemed an opinion of law of any state. All readers need to do their own research or pay an attorney for a legal opinion if one is necessary or desired.

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6 comments

Charles Adam Shultz

Charles Adam Shultz

Posted

http://www.taxpayeradvocate.irs.gov/About-TAS/History

Asker

Posted

It was not his account, it was ONLY hers?

Charles Adam Shultz

Charles Adam Shultz

Posted

If she was the only beneficiary, there is nothing the brother (son) can do about it unless she acted fraudulently in having the beneficiary designation made.

Asker

Posted

Do you understand what I have ask Sir ? I said nothing about a brother or a beneficiary designation made. I'm sorry I must not be making a very clear question?

Charles Adam Shultz

Charles Adam Shultz

Posted

Sorry, I thought your comment was on a different question. My apologies. Your statement was this -Son received early distribution of old Retire account he didn't remember. THE IRA WAS HIS, not the girl friends. Where he put the money is not relevant to the IRS tax liability. When he took the money out of the IRA, the tax became due.

Asker

Posted

Ok. He did pay the 20 or 25% early distribution fee at the time of getting it. My point is she is the 1 that had the unearned income with sole control of the moneys , does she not have to claim it as unearned income and pay the income tax on it ?

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