IRS written determination 201425022

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

REVENUE SER
U

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

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

MAR 25 2014

201425022

Uniform Issue List: 408.03-00

TIEPRATI

Legend:

Taxpayer A

=

IRA B

=

Financial Institution C

=

IRA D

=

Financial Institution E

=

Amount 1

=

Dear
:

This is in response to your request for a ruling dated November 8, 2013, as
supplemented by correspondence dated January 24, and February 11, 2014,
submitted on your behalf by your authorized representative, 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 of Amount 1 from IRA B.
Taxpayer A asserts that his failure to accomplish a rollover of Amount 1 to an
IRA, within the 60-day period prescribed by section 408(d)(3), was due to a
mistake made by Financial Institution E. Taxpayer A further represents that
Amount 1 has not been used for any purpose.

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Taxpayer A maintained IRA B, an individual retirement account under section
408(a) of the Code, with Financial Institution C. Taxpayer A represents that, on
April 21, 2011, he closed IRA B by receiving a cashier's check for Amount 1. On
April 27, 2011, Taxpayer A opened IRA D at Financial Institution E. He intended
to fund IRA D with the cashier's check for Amount 1 which he had received from
IRA B. An employee of Financial Institution E endorsed the check "for deposit
only." When Financial Institution C received the check for payment they refused
to honor the check claiming this was an irregular endorsement.

The records of Financial Institution E indicate that a form letter concerning the
dishonored check was mailed to Taxpayer A on May 3, 2011. Taxpayer A
represents that he did not receive this letter. Almost a year later on April 11,
2012, Taxpayer A attempted to use funds in IRA D to purchase stocks. After
attempting to complete this transaction, Taxpayer A was informed by Financial
Institution C that they were holding the unpaid cashier's check funds (Amount 1)
in suspense. Taxpayer A represents this is the first time he was learned the
rollover of Amount 1 was not completed. Taxpayer A received a replacement
check for Amount 1 which he deposited into IRA D on April 13, 2012. Taxpayer
A asserts that Financial Institution E erred by failing to endorse the check
properly and not informing him that the funds were never received from Financial
Institution C.

Based on the facts and representations, you request a ruling that the Internal
Revenue Service (the "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.

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

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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.

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 rollover of
Amount 1 into IRA D, was due to a mistake made by Financial Institution E.

Therefore, pursuant to section 408(d)(3) of the Code, the Service hereby waives
the 60-day rollover requirement with respect to the distribution of Amount 1 from
IRA B. Provided all other requirements of section 408(d)(3) of the Code, except
the 60-day requirement, were met with respect to Taxpayer A's contribution of
Amount 1 into IRA D on April 13, 2012, such contribution will be considered a
rollover contribution within the meaning of section 408(d)(3) of the Code.

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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 ruling does not authorize the rollover of amounts that are required to be
distributed by section 408(a)(6) of the Code.

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.

A copy of this letter ruling has been sent to your authorized representative
pursuant to a power of attorney on file in this office. If you wish to inquire about
this ruling, please contact
(I.D. #
),
, at ( )

Sincerely yours,
Carlton A. Wattens
Manager
Employee Plans Technical Group 1

Enclosures:
Deleted Copy of this Letter
Notice of Intention to Disclose, Notice 437

CC: