Why Does the IRS Always Miss My Birthday?

Have you ever had this happen? While preparing the final calculations for your donor, the numbers turn out just a little differently than those you provided in a preliminary illustration. The difference is not substantial. In fact, the deduction is a little larger, so it’s good news. Still, you wonder why. After all, numbers don’t lie. Right?

The discrepancy is probably due to the difference between “actuarial age” and actual age, or it could be the historic life expectancy assumptions used for planned gift calculations. First, let’s tackle actual versus actuarial age.

Actuarial Age

When asked, “How old are you?” most of us just blurt out the number of candles on our last birthday cake. But planned gift calculations are based upon “actuarial age,” which is the age, in whole numbers, at the nearest birthdate. In early conversations about a planned gift, prospective donors usually provide a number: “I’m 72.” But, if it turns out that their next birthday is nearer to the date of the gift than their last birthday, then their actuarial age is 73. Often this is good news: their deduction is a little larger. Still, it needs an explanation.

The Gift Date·Lives·Term input screen for PGM Anywhere allows you to enter either an age or a birthdate. A birthdate is required for the final calculation and will always result in a more precise calculation. If you enter an age, be sure to remind your prospective donor that the illustration is preliminary and may change a bit.

Life Expectancy

Another source of variability can be life expectancy: the number of years before the charity can expect to receive full use of the planned gift. Although the notion of “life expectancy” seems simple, it’s complicated. Essentially, life expectancy is the average length of time a person is expected to live. Life expectancy is based on the mortality experience of a large number of people summarized in a mortality table that estimates the probability of death over a certain period of time. Mortality tables are often based upon data from the U.S. Census and various public health sources.

Mortality tables and life expectancy are averages, and the law of large numbers applies, which means they are more accurate when applied to a larger population. While we can confidently predict the life expectancy of 75-year-old males is 15.7 years, it’s difficult to predict whether a specific 75-year-old male will still be living 15.7 years from now. What we can say is that, for a large population of 75-year-old males of similar characteristics, about half will still be living 15.7 years from now.

In addition, although it may seem counterintuitive, it’s important to understand life expectancy is not necessarily constant from year to year. For example, a 75-year-old with a life expectancy of 15.7 years is projected, on average, to live to age 90.7. However, one year later when he is 76, his life expectancy is 14.9 years and his projected age at death is 90.9 years. He’s gained nearly two and a half months! Think of life expectancy as a roadmap for a population group showing how many people are likely to be alive at each stop (age) on the journey. Life expectancy tells us, on average, how far along that road a person starting at a specific point (age) can expect to travel.

The life expectancy tables used in planned gift calculations are modified and adjusted from time to time. Differing life expectancy tables can make it tricky, especially when recreating the calculations for a past gift. Two tables are currently used in planned gift calculations:


The 2010CM table is based upon 2010 U.S. Census data. It is gender neutral. The 2010CM table is used to compute the charitable deduction for planned gifts made since June 1, 2023. There was a period between May 1, 2019 (when the 2010CM was proposed) and June 1, 2023, during which donors could choose the 2010CM table or its predecessor the 2000CM table. The 2010CM table is often used to compute FASB liabilities.

PGM Anywhere defaults to the appropriate life expectancy table depending upon the date of gift entered in the Gift Date·Lives·Term input screen. If the date of gift entered falls during a period when the donor was able to choose among different life expectancy tables, there is an option to select a different table.


The 2012IAR (“Individual Annuity Reserving”) table was adopted in 2012 by the National Association of Insurance Commissioners (NAIC) effective in 2015. Unlike the gender-neutral 2010CM table used to compute charitable deductions and the taxation of gift annuity payments, the 2012IAR is gender based and is a generational table incorporating projections for future mortality improvements. The expectation is that the 2012IAR will be valid for many years without becoming obsolete. The gender-based aspect of 2012IAR means that females and males have different life expectancies. The generational aspect of 2012IAR means that the life expectancy computed for a person of a specific age using 2012IAR will depend on the year of determination.

The 2012IAR table is required for gift annuity reserve calculations by many states, including New York, New Jersey, Washington, and California, and several other states will accept reserves calculated using the 2012IAR.


It’s not necessarily that the IRS misses your birthday, they just have their own point of view. So, if you’re stuck trying to resolve two different calculations, be sure you’ve used the beneficiary’s birthdate and selected the appropriate life expectancy table. Shakespeare wrote, “Time travels at different speeds for different people. I can tell you who time strolls for, who it trots for, who it gallops for, and who it stops cold for.” But, the Bard wasn’t shackled by actuarial age or mortality tables.

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