IRS written determination 201440024

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.

TAX I::XEMPT AND
GOVERNMENT ENTITIES
DIVISION
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224
JUL 0 9 2014
Uniform Issue List: 408.03-00
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
Legend:
Decedent A
TaxpayerW
IRAB
Account C
Bank D
BankE
Individual F
State G
Amount 1
Dear
XXXXXXXXXXXXXX:
= xxxxxxxxxxxxxx
= xxxxxxxxxxxxxx
= xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
= xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
= xxxxxxxxxxxxxx
= xxxxxxxxxxxxxx
= xxxxxxxxxxxxxx
= xxxxxxxxxxxxxx
= xxxxxxxxxxxxxx
This is in response to a request dated January 14, 2013, as supplemented by
correspondence dated May 6,7, 15, and June
9, 2014, submitted 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:

2
201440024
Decedent A was the owner of IRA B, maintained by Bank D. Decedent A received a·
distribution totaling Amount 1 from IRA B. You assert that the failure to accomplish a
rollover
of Amount 1 within the 60-day period prescribed by section 408(d)(3) of the
Code was due to Decedent A's worsening medical condition that impaired his ability
to
manage his financial affairs. You represent that Amount 1 has not been used for any
other purpose.
Decedent A maintained
IRA
B, an individual retirement account under section 408(a) of
the Code, with Bank D. In 2009, Decedent A's mental capacity began failing and was
later diagnosed with vascular dementia. Decedent A began arguing and harassing the
employees of Bank D over the status of his accounts.
In June 2010, Decedent A was
informed by the attorneys
of Bank D that his accounts would be closed in 30 days and
all funds distributed. As a result
of his mental capacity, Decedent A ignored this notice
and on July
13, 2010, checks totaling Amount 1 were distributed and mailed to
Decedent
A. In August 2010, these checks were discovered by Taxpayer W, Decedent
A's spouse who was not aware that the checks were IRA proceeds, and along with
other checks found, deposited into a non-IRA account with Bank
E. As the results of
these and other transactions, on October 6, 2010, Individual F was named Conservator
of Decedent A's affairs. Decedent A died on June 21, 2012. The nature of the
distributions was discovered
in November 2012, when Taxpayer W received a
deficiency notice from the Internal Revenue Service (Service).
Documentation from his physician has been submitted that reveals that Decedent A was
suffering from a medical condition at the time of these transactions and was not capable
of making sound financial decisions or understanding the consequences of his actions.
Based on the facts and representations, you request a ruling that the Service waive the
60-day rollover requirement 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 60
1
h
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

---------------------------
3
281440014
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)(8)
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)(1)
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)(1) of the Code.
Revenue Procedure 2003-16, 2003-4 I.R.S. 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)
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 presented and the documentation submitted is consistent with your
assertion that Decedent A's failure to
accomplish a timely rollover
of Amount 1 was
caused by Decedent A's medical condition and deteriorating health which impaired his
ability to manage his financial affairs, which resulted
in Amount 1 being deposited into a
non-IRA account.
Therefore, pursuant to section
408(d)(3)(1)
of the Code, the Service hereby waives the
60-day rollover requirement with respect to the distribution of Amount 1 from IRA
B.
You are 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 contribution,
Amount 1 will be considered a rollover contribution within the meaning
of section
408(d)(3)
of the Code.

4
241440014
However, it is noted that, to the extent that you, as executor and sole beneficiary of
Decedent A's estate, name a beneficiary of the IRA, section 1.401(a)(9)-4, of the
Income Tax Regulations provides that a designated beneficiary must be a beneficiary
as
of the date of death. The Service will not treat any beneficiary named by you, as
personal representative
of Decedent A's estate, as a designated beneficiary under
section 401 (a)(9)
of the Code. Thus, for purposes of section 401 (a)(9), the rollover IRA
will have no designated beneficiary.
This ruling does not authorize the rollover
of amounts that are required to be distributed
by section
401 (a)(9) of the Code.
Finally, the scope
of the executor's powers is a matter of state law. This ruling assumes
that your actions
in contributing Amount 1 into an IRA set up in Decedent A's name, are
in accordance with the laws of State G and pursuant to your authority as executor of the
estate.
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 taxpayer who requested it. Section
611 O(k)(3) of the
Code provides that it may not be used or cited as precedent.
A copy
of this letter is being sent to your authorized representative pursuant to a Power
of Attorney on file in this offiqe.
If
you wish to inquire about this ruling, please contact XXXXXXXXXXXXX (Identification
No. XXXXXXX) at (XXX) XXX-XXXX. Please address all correspondence to
SE:T:EP:RA:T1.
Enclosures:
Deleted copy of ruling letter
Notice
of Intention to Disclose
Sincerely,
Carlton
A. Watkins, Manager
Employee Plans Technical Group 1