Ruling to Remember: Waiving the 60-Day Rollover Requirement

Friday, November 08, 2013

In this month’s Ruling to Remember, we look at Private Letter Ruling 201339002, wherein a Taxpayer we will call Sue claimed that her old financial institution never adequately explained the 60-day rollover rule, costing her the ability to roll an IRA distribution over to a new IRA at a new financial institution.

Sue received a distribution from three IRAs and subsequently shopped around at different financial institutions for more favorable interest rates. Roughly two months later, she opened a rollover IRA at a new bank. However, that new bank informed her that the new amount could NOT be accepted as a rollover contribution because it was past the 60-day rollover period

Sue filed a private letter ruling with the Internal Revenue Service to waive the 60-day rollover requirement due to bank error for failing to notify her of the 60-day rollover requirement. IRS has the authority to waive the 60-day rollover requirement for a distribution from an IRA when the individual who failed to complete the rollover couldn’t because of financial institution error, death, hospitalization, postal error, incarceration, and/or disability.

In this case, Sue presented no evidence as to how her former financial institution committed any errors. The ability to rollover her IRA within the prescribed 60-day period was, at all times, within her control. IRS denied her request.

What You Need to Know:
YOYO – you are on your own. The financial institution is under no obligation to inform you of the 60-day rollover period.
 

2014 Retirement Guide Helps You Save and Stretch Wealth

– By Beverly DeVeny and Jared Trexler

 

 

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