Private Letter Ruling 201003032:
"Paula" received a distribution from an IRA maintained by her financial
institution. She intended to roll over this distribution to another IRA to be
established at her bank.
However, "Paula" asserted that her failure to accomplish the rollover within
the prescribed 60-day window was due to the Bank's error.
This situation has another twist because 'Paula' moved to the U.S. as an adult and has limited understanding of the English language, hindering her from noticing the Bank
error until the 60-day period had passed.
Earlier, she had been persuaded to move her IRA investments from
Certificates of Deposit to an IRA annuity to obtain a better rate of return.
She received bank statements from the financial institution. "Paula"
contended that although statements showed monthly withdrawals were
made from the IRA, she received just one check per year at the end of the
calendar year without making a request.
Eventually, she received a check from the financial institution for what we
will call Amount G, which was Amount F minus required withholding.
Amount F was a distribution of the total surrender value of the IRA.
"Paula" went to the Bank and presented the check for Amount F and
proceeds from a non-IRA Certificate of Deposit that matured. She says she
told the teller that the check was IRA money. However, the Bank
established an account -- a non-IRA Certificate of Deposit -- for the benefit
of Paula in which both the distribution from the IRA and proceeds of the
matured non-IRA Certificate of Deposit were deposited.
When "Paula's" son-in-law went through her tax return a year later, he
realized "Paula" had received a total distribution from the IRA instead of
only the required minimum distribution. At that time, more than 60 days
after Paula received the check, she became aware that the Certificate of
Deposit had been established as a non-IRA Certificate of Deposit.
"Paula" wanted IRS to waive the 60-day rule; however it declined her request
for an extension because 'Paula' had not submitted sufficient
documentation to prove she gave the Bank teller correct information in
regards to her IRA money and non-IRA CD proceeds. Therefore, IRA
proceeds and non-IRA funds were placed in the same non-IRA account
rather than two separate accounts..