@rbynaker 

Yes, it could work for someone whose AGI is below the filing limit.  I have several clients whom I advise to take withdrawals from their IRA, even if not required, so there is less to be taxed later.  It's usually a relatively small amount -- four digits, not five or six -- and their lifestyle is not extravagant.  I often point out that they saved the money for their old age, and now they are old, and they should spend some on themselves. 

As for the shell game of taking the $200 from one pocket to protect $1,000 in the other pocket:  Can't the same be accomplished with a non-qualified annuity?  There are some good products out there, typically not those marketed by banks and commissioned agents, that at least keep the cash out of the hands of government.  Yes, the income might be taxed eventually, but how much would it have to earn, for the tax in 20 years to be more than the tax avoided now?  In normal times, tax-free bonds might be an alternative, also.