IRS Grants Waiver of 60-Day Rollover Period Hodgson Russ LLP


When a qualifying qualifying plan or IRA distribution is made and the beneficiary wishes to transfer the distribution to another qualifying retirement plan, it is widely understood that the beneficiary must generally roll over within 60 days of receiving the distribution. if the rollover is not otherwise accomplished. under the direct rollover rules. For rollovers subject to the 60 day rollover period, it should be borne in mind that there are exceptions to the 60 day rollover period. In certain circumstances, there are procedures under which a taxpayer who receives a qualifying distribution from a qualifying plan or an IRA may be able to make a written self-certification to a plan administrator or an IRA custodian. that the taxpayer’s rolling contribution qualifies for a waiver of the 60 Day Rule. In other cases, a beneficiary may choose to seek an IRS ruling waiving the 60-day rollover rule – these waivers may be granted when failure to comply with the rule would be contrary to fairness or justice. good conscience, including in the event of accidents, disasters or other events. beyond the reasonable control of the taxpayer.

A recently released IRS private letter decision is an example of a situation where the IRS has been willing to grant a waiver of the 60-day rule. In Private Letter Ruling 202134019, the IRS granted a waiver of the 60 day rule. In this case, the taxpayer received a distribution of shares of company Y from IRA 1 due to the resignation of the custodian of IRA 1. The taxpayer arranged for custodian P of IRA 2 owns the assets of IRA 1, including the shares of company Y. IRA 2, however, did not receive the Y shares of the company within the 60-day period. The taxpayer claimed that she was unable to roll over the shares within the 60-day period because she was relying on the CFO of Company Y, who agreed to take care of the transfer of the shares and who failed to ensure that the shares of Company Y were received by IRA 2 during that 60 day period. After the 60-day period expired, Custodian P informed the taxpayer in writing that he had attempted to contact the CFO of Company Y on several occasions to inform him that IRA 2 had not received the shares. Company Y. Based on these facts, the IRS granted an exemption from the 60-day rollover rule with respect to the rollover of distributed shares of Company Y shares. The taxpayer had 60 days to from the issuance of the decision to roll over the Y shares of the company.

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