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Greetings, Jeanne, and welcome. You asked:

Can we transfer the Keogh into a SEP-IRA to get away from that pesky automatic IRS payment on distributions, until the tax is due (like next year) or will this trigger some horrible combustion of TAXES and PENALTIES?????

Yes, as W401K aka Bill pointed out, all that needs to be done to avoid any income tax withholding is to arrange for a direct transfer of the Keogh proceeds from that custodian to your traditional IRA custodian. That means the check cannot be made out in a way that allows you to cash it personally. Typically it would be made payable to the custodian FBO (for the benefit of) you as the account holder. Your IRA custodian can tell you how to have the check cut and to where it must be sent. As to penalties, as someone else noted, you are beyond the age where those would apply.

Regards..Pixy
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