Hi, don't know much about this sort of thing, but could be some kind of acorn worm.
I don't think it's a lugworm, as it doesn't appear to have any chaetae (bristles on its sides)
An acorn worm has a large acorn-shaped proboscis at the mouth end, which this doesn't seem to have.
Lugworms are found off the American coast according to Wikipedia http://en.wikipedia.org/wiki/Lugworm
This article says:
When fully grown, the lugworm of the coasts of Europe is up to 9 inches long and 3/8 inch in diameter. Other species on the North American coast range from 3 to 12 inches. The body is like that of an earthworm: ringed or segmented. Its head end, which is blackish-red and bears no tentacles or bristles, passes into a fatter middle part which is red. This in turn passes into a thinner yellowish-red tail end. The middle part has bristles along its sides and also pairs of feathery gills.
So the head end, which seem to be what is in the photo, doesn't have bristles. It also fits the description of the thin front end and fatter middle. Again, seeing a picture of the rest of the worm would help identify; also knowing exactly where it was found may help. They normally spend their lives buried in the sand.
Here's a picture of a lugworm from the internet as well.
It doesn't look like a lugworm to me. I think it is a peanut worm (Sipuncula - former a phylum of its own, soon perhaps classified within Annelida). The front end of the animal is to the left. 149 species or so in the following genera: Sipunculus, Xenosiphon, Siphonosoma, Siphonomecus, Phascolopsis, Golfingia, Nephasoma, Thysanocardia, Phascolion, Onchnesoma, Themiste, Phascolosoma, Antillesoma, Apionsoma, Aspidosiphon, Lihacrosiphon and Cloeosiphon. So Google around!
Phascolopis gouldii looks like a possible candidate, but...
Some pages and images: