PLR 1303023: IRS waives the 60-day IRA rollover deadline

Plain-English summary

An individual received a distribution from an IRA and asked the IRS to waive the 60-day rollover requirement. The individual said a financial adviser refused to accept the deposit even though the deadline had not yet expired, and the distributed amount remained set aside for the rollover. The IRS found that the failure to complete the rollover was caused by the adviser and waived the 60-day requirement under IRC § 408(d)(3)(I). The taxpayer received 60 days from the ruling letter's issuance to contribute the amount to an IRA, subject to the other rollover requirements.

Ruling snapshot

• Question: May the IRS waive the 60-day rollover requirement for the distribution from IRA X?
• Outcome: Approved, subject to the other requirements of IRC § 408(d)(3).
• Key authorities: IRC §§ 408, 72, and 6110; Rev. Proc. 2003-16.

Full text (IRS public release)

201303023

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

OCT 23 2012

GOVERNMENT ENTITIES
DIVISION

Uniform Issue List: 408.03-00

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Legend:

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TaxpayerA =

IRA 4 _ KEKEKKEKEKKEEEEEKEKEKERKERERERER

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Financial Advisor A =

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Amount A =

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Dear

This is in response to your request dated April 9, 2012 in which you request a
waiver of the 60-day rollover requirement contained in section 408(d)(3) of the Internal
Revenue Code (the “Code’).

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

Taxpayer A represents that on February 6, 2012, he received a distribution from
IRA X of Amount A. Taxpayer A asserts that his failure to accomplish a rollover of
Amount A into IRA X within the 60-day period prescribed by section 408(d)(3) was due
to an error made by his Financial Advisor A. Taxpayer A further represents that Amount
A is set aside for deposit into IRA X.

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Page 2

On February 2, 2012, Taxpayer A contacted Financial Advisor A to request a
distribution from IRA X. On February 6, 2012, Taxpayer A received Amount A from IRA
X sent by Financial Advisor A via a private delivery company. On April 5, 2012,
Taxpayer A contacted Financial Advisor A and made a request to roll Amount A back
into IRA X, at which time Financial Advisor A informed him that he had missed the 60
day rollover period and refused to deposit the funds back into IRA X. However, the 60
day period following Taxpayer A’s receipt of the check did not expire until April 6, 2012.

Based on the 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 A.

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

Section 408(d)(3)(B) of the Code provides that section 408(d)(3) does not
apply to any amount described in section 408(d)(3)(A)(i) 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) from an IRA
which was not includible in gross income because of the application of section
408(d)(3).

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

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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), 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.

The information presented and documentation submitted by Taxpayer A is
consistent with his assertion that his failure to accomplish a timely rollover was caused
by Financial Advisor A refusing to accept the deposit even though the 60 day period
following receipt of the checks had not yet expired.

Therefore, pursuant to section 408(d)(3)(I) of the Code, the Service hereby
waives the 60-day rollover requirement with respect to the distribution of Amount A
from IRA X. Taxpayer A is granted a period of 60 days from the issuance of this ruling
letter to contribute Amount A into an IRA. Provided all other requirements of section
408(d)(3) of the Code, except the 60-day requirement, are met with respect to such
contribution, Amount A will be considered a rollover contribution within the meaning of
section 408(d)(3) of the Code.

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 which
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 () _
x** Please address all correspondence to SE:T:EP:RA:T2.

Sincerely yours,

Donzell Littlejohn, Manager,
Employee Plans Technical Group 2

Page 4

Enclosures:
Deleted copy of ruling letter
Notice of Intention to Disclose

201303023