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Approx. 4 years ago I began prematurely withdrawing funds from my IRA under the provisions of the "substantially equal periodic payment exception -- Notice 89-25." While I have paid oridinary income taxes on the withdrawal, I have claimed the exception from the penalty (I'm currently 56 years old). A number of things have happened since.

(1) I've increased the amount withdrawn due to increased living costs.

(2) The IRA has increased dramatically in value.

(3) I've had to withdraw additional funds to pay for my daughter's college education.

(4) I still haven't paid any penalty.

Any suggestions as to my position with the IRS? Should I begin paying penalties? Does the change in the value in the IRA have any bearing? Should I voluntarily go back and pay any perceived penalties?

Thanks for your help, Bill
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