IRA Letter of Acceptance (LOA)
Hi:
It seems many firms require a LOA in addition to a TOA form when rolling assets out. What exactly is an LOA? Is it an IRS form or just a letter of instructions on company letterhead requesting for a rollover? Thank in advance.
Permalink Submitted by Ben Meyer on Tue, 2015-09-01 12:44
It simply means that the receiving institution of a direct rollover or IRA transfer needs to indicate that they will accept the funds into the applicable type of qualified account. The receiving institution can commence the transaction with their form, signed by an individual at the receiving institution and the account holder, which they will send to the disbursing institution. As a frequent alternative, the disbursing institution will send their own form to the receiving institution, with a request that they sign it in the applicable spot and return it to the disbursing institution. All of these forms are signed first by the account holder.
Permalink Submitted by Jose Morales on Tue, 2015-09-01 16:35
There is almost always “acceptance” language on an IRA Transfer form. I spend a lot of time pointing that out to banks that call to let me know they won’t proceed with the transfer request sent to them without a letter of acceptance.
Permalink Submitted by Peter Gould on Mon, 2020-10-19 02:40
I am being told that IRS “REQUIRES” a Letter of Acceptance from the receiving institution on a direct IRA trustee-to-trustee transfer. I’ve done some research on this – reviewed: IRC Section 408, IRC Section 402(f), IRS Publication 590-B, IRS Form 1099-R Instructions, IRS website, etc. and can find nothing about an LOA requirement. Can anyone give me a cite for this requirement? have also been told that IRS doesn’t permit a standing LOA that would cover monthly direct transfers. I doubt such a prohibition exists. Anybody got a cite for this one? Thanks!
Permalink Submitted by Alan - IRA critic on Mon, 2020-10-19 03:44
The IRS and the tax code are silent on LOAs. This is solely an IRA custodian requirement. Custodians often mispresent their own requirements as an IRS requirement.
Permalink Submitted by Peter Gould on Mon, 2020-10-19 13:05
Thanks Alan -That’s my take on it, too. Don’t know if I can get my custodian to back down – may push on it for a while.