PLR 1216049: IRS declines to waive the 60-day IRA rollover deadline after a calendar error

Plain-English summary

An individual withdrew money from an IRA to consolidate IRA accounts and obtain a higher rate of return. The individual said the rollover was late because the wrong date, relating to a distribution from another IRA, was entered on a calendar, and represented that the distribution check was still held. The IRS declined to waive the 60-day requirement because the taxpayer had not provided evidence showing how the waiver factors affected the ability to complete the rollover on time. The amount was not eligible for rollover treatment and had to be included in the taxpayer's 2011 gross income.

Ruling snapshot

• Question: Could the IRS waive the 60-day IRA rollover requirement after the taxpayer entered the wrong date on a calendar?
• Outcome: Denied
• Key authorities: IRC § 408(d)(3); Rev. Proc. 2003-16; IRC § 6110(k)(3).

Full text (IRS public release)

GOVERNMENT ENTITIES

INTERNAL REVENUE SERVICE
WASHINGTON. D.C. 20224

DEPARTMENT OF THE TREASURY
TAX EXEMPT AND JAN 24 2012

201216049

Uniform Issue List: 408.03-00

TEP:RA:T1
Legend:

Taxpayer A =

IRA B =

Amount 1 =

Dear:

In a letter dated June 8, 2011, you requested a waiver of the 60-day rollover
requirement contained in section 408(d)(3) of the Internal Revenue Code (“Code”)

The following facts and representations have been submitted under penalty of perjury in
support of the ruling requested:

Taxpayer A represents that he withdrew Amount 1 from IRA B, an individual retirement
account described in section 408 of the Code, on March 28, 2011 [the distribution check
is dated March 26, 2011]. Taxpayer A also represents that he withdrew the funds to
consolidate his IRA accounts and to obtain a higher rate of return. Taxpayer A asserts
that his failure to accomplish a rollover of Amount 1 within the 60-day rollover period
prescribed by section 408(d)(3) of the Code was due to his entry of the wrong date [the
date of a distribution from another IRA of taxpayer A] on his calendar. Taxpayer A also
asserts that he still has IRA B’s distribution check.

Based on the above facts and representations, you request a ruling that the Internal

Revenue Service waive the 60-day rollover requirement contained in section 408(d)(3)
of the Code with respect to the distribution of Amount 1.

Section 408(d)(1) of the Code provides that, except as otherwise provided in section
408(d) of the Code, any amount paid or distributed out of an IRA shall be included in

201216049

gross income by the payee or distributee, as the case may be, in the manner provided
under section 72 of the Code.

Section 408(d)(3) of the Code provides the rules applicable to IRA rollovers.

Section 408(d)(3)(A) of the Code provides that section 408(d)(1) of the Code does not

apply to any amount paid or distributed out of an IRA to the individual for whose benefit
the IRA is maintained if -

(i) the entire amount received (including money and any other property) is paid
into an IRA for the benefit of such individual not later than the 60th day after the day on
which the individual receives the payment or distribution; or

(ii) the entire amount received (including money and any other property) is paid
into an eligible retirement plan (other than an IRA) for the benefit of such individual not
later than the 60th day after the date on which the payment or distribution is received,
except that the maximum amount which may be paid into such plan may not exceed the

portion of the amount received which is includible in gross income (determined without
regard to section 408(d)(3) of the Code).

Section 408(d)(3)(B) of the Code provides that section 408(d)(3) of the Code does not
apply to any amount described in section 408(d)(3)(A)(i) of the Code received by an
individual from an IRA if at any time during the 1-year period ending on the day of such
receipt such individual received any other amount described in section 408(d)(3)(A)(i) of
the Code from an IRA which was not includible in gross income because of the
application of section 408(d)(3) of the Code.

Section 408(d)(3)(D) of the Code provides a similar 60-day rollover period for partial
rollovers.

Section 408(d)(3)(I) of the Code provides that the Secretary may waive the 60-day
requirement under sections 408(d)(3)(A) and 408(d)(3)(D) of the Code where the failure
to waive such requirement would be against equity or good conscience, including
casualty, disaster, or other events beyond the reasonable control of the individual
subject to such requirement. Only distributions that occurred after December 31, 2001,
are eligible for the waiver under section 408(d)(3)(I) of the Code.

Rev. Proc. 2003-16, 2003-4 I.R.B. 359 (January 27, 2003) provides that in determining
whether to grant a waiver of the 60-day rollover requirement pursuant to section
408(d)(3)(I) of the Code, the Service will consider all relevant facts and circumstances,
including: (1) errors committed by a financial institution; (2) inability to complete a
rollover due to death, disability, hospitalization, incarceration, restrictions imposed by a
foreign country or postal error: (3) the use of the amount distributed (for example, in the

case of payment by check, whether the check was cashed); and (4) the time elapsed
since the distribution occurred.

201216049

You have not presented any evidence to the Service as to how any of the factors

outlined in Rev. Proc. 2003-16 affected your ability to timely roll over Amount 1 to an
IRA.

Therefore, pursuant to section 408(d)(3)(I) of the Code, the Service hereby declines to
waive the 60-day rollover requirement with respect to Amount 1. Amount 1 is not
eligible to be treated as a rollover contribution within the meaning of section 408(d)(3)
and must be included in Taxpayer A's gross income for the 2011 tax year.

No opinion is expressed as to the tax treatment of the transaction described herein

under the provisions of any other section of either the Code or regulations that may be
applicable thereto.

This letter is directed only to the taxpayer who requested it. Section 6110(k)(3) of the
Code provides that it may not be used or cited as precedent.

If you wish to inquire about this ruling, please contact
at

Sincerely yours,

Carlton A. Watkins, Manager
Employee Plans Technical Group 1

Enclosures:
Deleted Copy of this Letter
Notice of Intention to Disclose, Notice 437