Once again, the joke is on me. I knew better. I know what the Circumlocution Office is. I read Kafka. I know that Lucy always yanks the football away right before Charlie Brown can kick it. Yet, I wrote in the July newsletter that “the IRS had issued final rules for non-spouse beneficiaries of retirement plans." “Hallelujah” I wrote. Finally, we could incorporate the rules into our clients’ financial plans.
Nope. The IRS announced last week that “additional required minimum distribution regulations won’t apply until 2026.” I have had Ryan read the announcement and I discussed them with a friend of mine who is a partner at a large CPA firm. Nobody has any idea what the IRS means since the language is so impenetrable as to make Iron Dome look like a cheap umbrella. The most terrifying part is that “taxpayers must apply a reasonable, good-faith interpretation of the statutory provisions underlying the amendments.” *
I have no idea what that means. What I do know is that we need to discuss with every client that has a beneficiary IRA what the least risky and least costly approach to the non-rules means for each of them. In the meantime, I shall keep the advice of Thomas Sowell in mind that “you will never understand bureaucracies until you understand that for bureaucrats procedure is everything and outcomes are nothing.” ** This is the inverse of what good financial planners strive to do. If you have a beneficiary IRA, expect a call from us.
* "IRS Announces Additional Required Minimum Distribution Regulations Won't Apply Until 2026." Thomson Reuters/PPC, All rights reserved. 12.20.2024. https://www.thomsonreuters.com/en.html. Accessed on 12.23.2024.
** https://www.azquotes.com/author/13901-Thomas_Sowell/tag/bureaucracy.