IRS written determination 201425020

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document.

TREASURY
REVENUS CON

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

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

MAR 26 2014

201425020

Uniform Issue List: 408.03-00

TiEP.RATTI

Legend:

Taxpayer A

=

IRA B

=

Financial Institution C

=

Account D

=

Financial Institution E

=

Amount 1

=

Amount 2

=

Amount 3

=

Dear:

This is in response to your submission dated April 17, 2013, as supplemented by
correspondence dated February 25, 2014, 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 he received a distribution from IRA B totaling Amount 1.
Taxpayer A asserts that his failure to accomplish a rollover of Amount 2 within the 60-
day period prescribed by section 408(d)(3) was due to a mistake made by Financial
Institution E.

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Taxpayer A represents that he owned annuity IRA B, which was maintained by
Financial Institution C. On June 15, 2010, seeking a better interest rate and on the
recommendation of a representative of Financial Institution E, Taxpayer A received a
distribution of Amount 1 from IRA B. On June 16, 2010, Taxpayer A met with the
representative of Financial Institution E who completed the application for an IRA
annuity with Financial Institution E. However, the representative marked the NQ (non-
qualified) box on the application instead of the IRA box. Again, on the recommendation
of the representative of Financial Institution E, Taxpayer A invested Amount 2 in the
annuity, intending Amount 3 as his RMD for 2010. The mistake was not discovered
until 2012, when Taxpayer A was contacted by the Service. The ruling request is
supported by a letter from the representative of Financial Institution E that explains how
the mistake occurred.

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 2.

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

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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 section 408(d)(3)(A) 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)(1), 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 timely rollover was due to a mistake
made by Financial Institution E, which resulted in Amount 2 being deposited into a non-
IRA annuity.

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 2 from IRA B.
Provided all other requirements of section 408(c)(3) of the Code, except the 60-day
requirement, are met with respect to such contribution, the contribution of Amount 2 into
an IRA will be considered a valid rollover contribution within the meaning of section
408(d)(3) of the Code.

This ruling does not authorize the rollover of any 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.

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201425020

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
Please address all correspondence to SE:T:EP:RA:T1.

by phone at

Sincerely,
Carlton A. Watkins
Carlton A. Watkins, Manager
Employee Plans Technical Group 1

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

CC: