Too many non-trustee roll-overs in 12 months
I have a client who withdrew most of his SEP in 2013 and deposited it into 2 IRA’s with 60 days. Then withdrew from these new IRA’s in 2013 and a redeposit of the withdrawals back to the IRA’s within 60 days. I am trying to work this timeline through the “only 1 per 12 months” rule(s) and I expect to come up with premature distributions on the second round of withdrawals.
My question is the possibility of some way of working directly with the IRS to try to sort out the situation and maybe receive some meaningful mitigation.
Thank you.
Permalink Submitted by Alan - IRA critic on Fri, 2014-04-04 16:26
You are correct about the second round of rollovers being disallowed. I know of no template to secure relief from these violations which would result in them being taxable and possibly subject to penalty with the excess contributions having to be corrected to remove those rollovers from the IRAs.