Changing Permalinks to a Custom Permalink causes a 404 Error [no matter what I do]

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…remove the <IfModule mod_rewrite.c> wrapper? Or include RewriteEngine On at the top of the .htaccess file, above the <IfModule> wrapper?
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@MrWhite Tried it, still get a internal error.

That indicates that you don’t have mod_rewrite installed on your server or you are not permitted to use mod_rewrite in .htaccess files (see the AllowOverride directives for the later) – that will explain why the permalinks are not working.

With the <IfModule mod_rewrite.c> wrapper in place then the directives are simply not processed when mod_rewrite is not installed. It fails silently.

See the following StackOverflow question regarding enabling this:
https://stackoverflow.com/questions/869092/how-to-enable-mod-rewrite-for-apache-2-2

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