IRS waives the 60-day IRA rollover deadline for a fraud victim

Plain-English summary

An IRA owner withdrew funds after fraudsters impersonated financial-institution employees, a police officer, and a prosecutor. They falsely told her that she was under investigation and had to pay bail, leading her to wire the withdrawal through a new account to a foreign bank account. She discovered the fraud after the normal 60-day rollover period had begun and reported it to enforcement agencies. IRC § 408(d)(3)(I) permits the IRS to waive the deadline when enforcing it would be against equity or good conscience because of circumstances beyond the taxpayer's reasonable control. The IRS found the submitted information consistent with her account and waived the deadline. She received 60 days from issuance of the ruling to return the withdrawn amount to a rollover IRA, assuming all other rollover requirements are met.

Ruling snapshot

• Question: May the IRS waive the 60-day deadline for returning an IRA distribution that the taxpayer lost through an impersonation fraud scheme?
• Outcome: Approved
• Key authorities: IRC §§ 408(a), 408(d)(1), 408(d)(3), and 401(a)(9); Rev. Proc. 2003-16

Full text (IRS public release)

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, DC 20224

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

Release Number: 202632023

Release Date: 8/7/26
Uniform Issue List 408.03-00 May 12, 2026

LEGEND

Taxpayer A =
IRA B =
Police Department C =
Financial Institution D =
Financial Institution E =
Individual 1 =
Individual 2 =
Amount 1 =
Date 1 =
Date 2 =
Date 3 =
Date 4 =

Dear :

This is in response to your letter dated March 11, 2026, as supplemented by
correspondence dated April 15, 2026, submitted on your behalf by your authorized
representatives 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”).

You submitted, under penalties of perjury, the following facts and representations in
support of your ruling request.

Taxpayer A represents that on Date 3, she withdrew Amount 1 from IRA B, a rollover
IRA under section 408(a) of the Code. Taxpayer A asserts that she was unable to
accomplish a rollover of Amount 1 within the 60-day period prescribed by section
408(d)(3) because she was the victim of a fraud scheme.

On Date 1, Taxpayer A was contacted by phone from individuals falsely claiming to be
representatives from Financial Institution D. The individuals claimed to be calling
concerning denied transactions related to Taxpayer A’s credit card. Taxpayer A did
not have a credit card with Financial Institution D. The individuals directed Taxpayer A
to file a police report and transferred her to Individual 1, who falsely claimed to be an
officer with Police Department C.

On Date 2, Individual 1 told Taxpayer A she was under investigation for financial
crimes related to transactions with Financial Institution E and was transferred to
Individual 2 who falsely claimed to be a prosecutor. Individual 2 falsely claimed
Taxpayer A would need to pay bail to avoid detention.

On Date 3, Taxpayer A withdrew Amount 1 from IRA B and later wired the amount to
a newly created account and then wired to a foreign bank account in the name of
Individual 2.

On Date 4, Taxpayer A realized she had been defrauded and filed reports with
multiple enforcement agencies. Police Department C confirmed Individual 1 appeared
to have been impersonating an officer.

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 1 from IRA B on Date 3.

Section 408(a) of the Code defines an individual retirement account to mean a trust
created or organized in the United States and requires that the trustee be a bank or an
approved non-bank trustee.

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

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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.

Section 408(d)(3)(E) of the Code provides that the rollover provisions of section 408(d)
do not apply to any amount required to be distributed under section 408(a)(6).

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.

Section 3.02 of Revenue Procedure 2003-16, 2003-4 I.R.B. 359 (“Rev. Proc. 2003-16”),
provides that the Service will issue a ruling waiving the 60-day rollover requirement in
cases 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 taxpayer. 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.

The information and documentation submitted are consistent with Taxpayer A’s
assertion that she was unable to accomplish a rollover of Amount 1 within the 60-day
period prescribed by section 408(d)(3) of the Code because she was the victim of a
fraud scheme.

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 1 from IRA B on
Date 3. Taxpayer A is granted a period of 60 days from the issuance of this ruling letter
to contribute Amount 1 into a Rollover IRA. Provided all other requirements of section
408(d)(3) of the Code, except the 60-day requirement, are met with respect to such

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contribution, Amount 1 will be considered a rollover contribution within the meaning of
section 408(d)(3) of the Code.

This ruling does not authorize the rollover of amounts that are required to be distributed
by section 401(a)(9) 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 taxpayers who requested it. Section 6110(k)(3) of the
Code provides that it may not be used or cited as precedent.

Pursuant to a power of attorney on file with this office, a copy of this letter ruling is being
sent to your authorized representatives.

If you wish to inquire about this ruling, please contact , Badge No. 1000XXXXX at (XXX)
XXX-XXXX. Please address all correspondence to SE:T:EP:RA:T1.

Sincerely,

Frederick L. Parker, Manager,
Employee Plans Technical Group 1

Enclosures:

Deleted copy of this letter
Letter 437 Notice of Intention to
Disclose

Cc: