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Northwest OH Legal Blog

Tuesday, October 4, 2016

Internal Revenue Service Issues Guidance Regarding Waiver of 60-Day Rollover Requirement

In Internal Revenue Service (“IRS”) Procedure 2016-47, the IRS announced that a taxpayer who fails to meet the 60-day requirement for indirect rollovers from retirement accounts may make a written self-certification to an individual retirement account (“IRA”) trustee or a plan administrator that the rollover contribution satisfies one of 11 specific reasons listed in the IRS Revenue Procedure 2016-47 for excusing the missed 60-day deadline.

The trustee or administrator may rely on the taxpayer’s self-certification, subject to verification if the taxpayer is audited.  The certification must match the sample in the appendix of IRS Revenue Procedure 2016-47 word for word or be “substantially similar in all material respects.”  To qualify for relief from the 60-day requirement, the IRS must not have previously denied relief to the taxpayer for the rollover in question, and the taxpayer must have missed the 60-day deadline for one of the following reasons:

  1. The financial institution receiving the contribution or making the distribution to which the contribution relates made an error. 
  2. The distribution check was misplaced and never cashed. 
  3. The distribution was deposited into an account that the taxpayer mistakenly thought was an eligible retirement plan. 
  4. The taxpayer’s principal residence was severely damaged. 
  5. A member of the taxpayer’s family died. 
  6. The taxpayer or a member of the taxpayer’s family was seriously ill. 
  7. The taxpayer was incarcerated. 
  8. Restrictions were imposed by a foreign country. 
  9. The post office made an error. 
  10. The distribution was made on account of a levy under Section 6331 of the Internal Revenue Code, the proceeds of which have been returned to the taxpayer. 
  11. The party making the distribution delayed providing information that the receiving plan or IRA needed to complete the rollover despite the taxpayer’s reasonable efforts to obtain such information.

The rollover contribution must be made to the plan or IRA as soon as practicable after the reason or reasons for missing the 60-day deadline no longer prevent the taxpayer from making the contribution.  For this purpose, the IRS has established a safe harbor.  The soon-as-practicable standard is deemed to be satisfied if the contribution is made within 30 days after the reason or reasons no longer prevent the taxpayer from making the contribution.  IRS Form 5498, IRA Contribution Information, will be revised to permit plan trustees or administrators to report these rollovers.  The plan administrator or IRA trustee may rely on the certification unless it is aware of facts contrary to the self-certification. According to the IRS, the taxpayer’s self-certification is not a waiver of the 60-day requirement because the IRS can still deny the waiver on audit if the IRS determines that the taxpayer did not satisfy the requirements for the waiver.

If you have any questions or concerns regarding this communication, please do not hesitate to call Allotta | Farley Co., LPA at (419) 535-0075 or email megarner@allottafarley.com.


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With offices in Toledo and Lima, OH Allotta Farley Co., L.P.A. serves clients throughout northwest OH with various legal matters. Areas of service include Allen County, Ashland County, Auglaize County, Crawford County, Defiance County, Erie County, Fulton County, Hancock County, Hardin County, Henry County, Huron County, Lucas County, Marion County, Mercer County, Morrow County, Ottawa County, Paulding County, Putnam County, Richland County, Sandusky County, Seneca County, Van Wert County, Williams County, Wood County, Wyandot County.

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