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J Simmons

Nonqualified Annuity

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Does anyone know if there's an office of the IRS that entertains requests to allow late starting payouts over the life of the death beneficiary of a nonqualified annuity?

Section 72(s) has rules similar, but not the same as the RMD rules under 401(a)(9). If the annuity payout had begun before the contract holder died, then those payouts must continue as rapidly as if the contract holder had not died--unless payouts of the remaining value as an annuity over the life of the beneficiary begin within 1 year of contract holder's death. (Only if the annuity payout had not begun by the time of the contract holder's death must the entire contract value be paid out within 5 years of that death.)

I was contacted today by a beneficiary of a contract holder who died in 2013. The 1 year mark passed in 2014, without payout beginning on the life of the beneficiary. If you know of an office of the IRS with authority to waive that, it would be greatly appreciated if you would send information about that office to me at jsimmons@ida.net. Thank you.

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