Author Topic: Forbes - Backdoor Roth: IRS Unlocks the 'Door' for High-Income Savers  (Read 811 times)

Mother Fussbudget

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Curious if anyone saw this article in Forbes.  The author's take is the IRS is essentially agreeing the backdoor-roth IRA is legal.

Quote
IRS had been relatively tight-lipped as to its official view on the matter… or at least it had been until this past Tuesday. Earlier this week, on a July 10thTax Talk Today webcast, Donald Kieffer Jr., a tax law specialist with the IRS’s Tax-Exempt and Government Entities Division, gave the Back-Door Roth IRA it’s biggest vote of confidence yet. Here’s what Kieffer had to say about the strategy:

“I think the IRS’s only caution would be whenever we see words like ‘back door’ or ‘workaround’ or other step transactions that are putatively enabling a way to get around limits - especially statutory contribution limits - you generally find the IRS is not happy and prepared to challenge those,” Kieffer said. “But in this one that we’re talking about, it’s allowed under the law.” (emphasis added)

I can't be the only one who saw this, and thought it was interesting from a mustachian perspective...

FIRE@50

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Thanks for sharing.

I had no idea that the legality of these plans was in question.

appleshampooid

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Thanks for sharing.

I had no idea that the legality of these plans was in question.
The "step doctrine" essentially says that if you take a certain number of steps that are all legal on their own, to circumvent some other thing that is not allowed, the entire process can be deemed as disallowed. Only if that was your *intent*, of course...

https://en.wikipedia.org/wiki/Step_transaction_doctrine