SEP Contributions
I have a client that thought he made a $20,500 SEP contribution in Sept 2005 for his 2004 taxes (extension to Oct 15) and in fact the money went into a non-SEP IRA/non-qualified account.
Assuming that the instiution holding the IRA cannot backdate/amend the 2005 form 5498, are there any other creative solutions to this problem to perhaps appeal to the IRS that the client intention was there to contribute to SEP instead of a taxable account?
The taxable account now could likely be flipped into the SEP, but would trigger 5498 as a SEP contribution for 2007
If someone could HELP me help my client, that would be great ❓
Permalink Submitted by Alan Spross on Mon, 2007-08-27 16:58
Don’t know of any solutions. If the IRA custodian was at fault, and would have to be nearly totally at fault, recourse from the custodian could be pursued for the added tax liability plus interest on the amended return. Otherwise, PLRs are very expensive now, and to my knowledge the IRS has not been amenable to reconstructing taxpayer intentions in cases such as this. They are more likely to favorably rule on a botched rollover than new contribution issues.