Ruling to Remember: Waiver of the 60-Day IRA Rollover Requirement

A taxpayer we will call "Greg" asserted that his failure to accomplish a prompt rollover of his distributed IRA funds within the prescribed 60-day IRA rollover window was due to the medical condition and death of his mother.

The story goes...

Greg received a statement from his company in early December, indicating a retirement plan distribution less federal income tax withholding. Upon receipt of the statement, Greg called his former employer and was informed that a check representing his investment in an employer retirement plan had been mailed to him a few days prior.

Greg maintained that he told his former employer that he had never requested or received the check. Nearly three months later, the former employer re-issued the check and about one month after that, Greg deposited the full amount into his IRA. Greg also asserted that he was the primary caregiver of his mother starting in mid-August (prior to the issued statement) until her death in early April of the following year (after the check issuance was resolved), allowing for a hardship exception to the 60-day IRA rollover window.

He requested a private letter ruling (201330047) with IRS to waive the 60-day IRA rollover requirement with respect to the distribution discussed above.

As it turns out, Greg didn't need the waiver. IRS ruled that documentation shows that the distributed amount was successfully deposited into his IRA within 60 days after the check was actually received. The waiver was denied since there was no need for the waiver.

Notes: The 60-day IRA rollover window begins after the check is RECEIVED, NOT when it is ISSUED. Also, if the check is made out to the new custodian instead of the individual, there is no 60-day rollover period.

- By Beverly DeVeny and Jared Trexler

Posted in: 60-day IRA rollover window,beverly deveny,Ed Slott,ed slott ira,ed slott retirement,financial,financial advisor,IRAs,IRS,private letter ruling,ruling to remember,Tax Planning