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Scenario $3$: Series of Substantially Equal Periodic Payments $($SEPP$)$ Modification

Emily started taking SEPP distributions from her IRA at age $54.$ Two years later, at age $56,$ she needs to change the distribution amount due to unforeseen circumstances.

Original SEPP distribution: $$30,000$ annually

New SEPP Distribution: $$25,000$ annually

Wages: $$22,000$

Interest and Dividend Income: $$600$

Itemized Deductions: $$11,000$

Allowable deduction for self$-$employment tax: None

Questions:

Are there potential penalties for modifying the SEPP distributions?

Analyze the rules and restrictions on modifying SEPPs.