Section 72, IRS tax code.
Q.What is an Irs Tax Code ? One of those senior organizations I have never heard of has dropped me a printed card in which it states that according to the Section 72, if one is over 65, one is eligible to take advantage of preferential tax treatment and pay no social security taxes. While I'm 73, I still work half-days and a chunk of my earnings are deducted for SS. Which is funny. On one hand I collect SS every month but lose part of it when it is deducted from my pay check. Can someone tell me what this is all about?
A.How much does the card ask you to spring for to learn about the never before revealed secrets of section 72? While there could be (and I'm sure there are) other sections 72, I assume the mailing you received is referring to Internal Revenue Code section 72, which is also cited as 26 USC 72. Like all public laws in this country, everything in section 72 is a matter of public record. If you want to look at section 72 (a somewhat lengthy section), you can click on: http://www4.law.cornell.edu/uscode/ Then scroll down to Title 26 and click on it. I've worked with in the tax law field for 12 years and I'm not aware of anything in section 72 that comes close to what the unnamed senior organization that sent you the card is trying to tease you with. In general, section 72 spells out how pensions and annuities are taxed. It also includes subsections that impose excise taxes on certain pension and IRA distributions- such as often cited section 72(t) concerning the 10% penalty for early (prior to age 59 1/2) distributions. Other sections impose taxes on social security earnings. Without looking them up, I believe it's section 1402 for self-employment tax and section 3121 for wages. Section 86 imposes income tax on the social security benefits of certain taxpayers, generally those with other income of more than $25,000 (Single) or $32,000 (Married). You may not want to go all this trouble, but if I received the same card in the mail, I would make copies and send one to the reporter covering the consumer beat for the local newspaper and the consumer reporters for the local TV stations. I'd also send a copy to the state's attorney general (I'm sure you can find out how to contact him / her from the Internet). The U.S. Federal Trade Commission (FTC) has shown heightened interest lately in investigating suspected schemes to defraud senior citizens. I'm sure their contact information is on the Internet also.
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