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July 29
W-9, W-8BEN and W-8 BENE: IRS issues new forms and new rules;
Deborah Crawford

July 31
ACH Security Framework Rule - Small Rule, Big Implications;
Rayleen Pirnie

August 6
Part I
Flood Insurance: Requirements and Best Practices
A Two-Part Companion Webinar Series;
David Dickinson and Jerod Moyer

August 12
A to Z of Reg E;
Andy Zavoina

August 13
Part II
Flood Insurance: Requirements and Best Practices
A Two-Part Companion Webinar Series;
David Dickinson and Jerod Moyer



Topic Options
#75788 - 04/24/03 07:01 PM IRA unclaimed property
c.a.r Offline
Gold Star

Registered: 10/31/02
Posts: 375
Loc: Texas, USA
Can we escheat an IRA if there has been no activity for over 5 years. And if the answer is no and we did it anyway how do we get it back.
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Operations Compliance
#75789 - 04/24/03 10:45 PM Re: IRA unclaimed property
MrHawaii Offline
100 Club

Registered: 11/13/02
Posts: 154
C.A.R. you crack me up!

Unclaimed property law is state law, so there is no one right answer to this question. I can tell you that we escheat IRAs if there is no activity in five years AND the customer is over 70 1/2 years old. This is because our state law specifically says that the five year inactivity period begins when the funds become payable, our Legal department interpreted this as 70 1/2.

I can also tell you that the IRS is SILENT on this subject.

As for getting the money back, I have no idea. The customer may just have to file a claim with the state.
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#75790 - 04/25/03 10:04 AM Re: IRA unclaimed property
c.a.r Offline
Gold Star

Registered: 10/31/02
Posts: 375
Loc: Texas, USA
Quote:

C.A.R. you crack me up!





I hope this is a good thing... I am usually very silent on this site. I am so new that I hate to say much.
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#75791 - 04/25/03 10:18 AM Re: IRA unclaimed property
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 49437
Loc: Galveston, TX
Hey C.A.R. - don't be afraid to fire away. We were all new once, only some of us were new much longer ago than others.
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#75792 - 04/25/03 10:39 AM Re: IRA unclaimed property
c.a.r Offline
Gold Star

Registered: 10/31/02
Posts: 375
Loc: Texas, USA
Thanks
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#75793 - 04/29/03 02:56 PM Re: IRA unclaimed property
Anonymous
Unregistered


If it is Texas Unclaimed Property Law, then it is 5 years from the Required Beginning Date, or age 70 1/2. If escheated in error, there is a Holder refund form to obtain funds from the state when reported in error. It can be found on the State of Texas Unclaimed Property website.

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#75794 - 04/30/03 07:54 AM Re: IRA unclaimed property
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17102
Loc: Another trip around the sun
Only because it's an IRA, you have an extra tool that you may use to help find the owner of the funds prior to escheating them to the state. From the 2003 Instructions to the 1099R:

Missing Participants
The IRS administers a letter-forwarding program that could help plan administrators contact missing retirement plan participants (or possibly their beneficiaries). To inform individuals of their rights to benefits under a retirement plan, the IRS will forward letters from plan administrators to the missing individuals if the administrators provide the names and social security numbers (SSNs) of the missing individuals. However, the IRS cannot disclose individuals' addresses or give confirmation of letter delivery. All undelivered letters will be destroyed. For further information, see Rev. Proc. 94-22, 1994-1 C.B. 608, or contact your IRS office

Regardless of state laws regarding escheat, I suggest you take this step whenever you lose contact with the owner of the funds. Please note, there is no requirement that the IRA be in "pay out" status before you use this service.
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