IRS written determination 201549031

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.

REASURY

INTERNAL

SERVICE

REVENUE

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224
SEP 0 9 2015

201549031

Uniform Issue List: 402.00-00

SEIT: EPIRATI

Legend:

Taxpayer A

=

Plan B

=

Plan C

=

Financial Institution D

=

State E

=

Account F

=

Financial Institution G

=

State H

=

Amount 1

=

Amount 2

=

Amount 3

=

Amount 4

=

Amount 5

=

Amount 6

=

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Dear
:

This is in response to your request dated May 18, 2015, as supplemented by
correspondence dated June 18, 2015, submitted on your behalf by your
authorized representative, in which you request a waiver of the 60-day rollover
requirement contained in section 402(c)(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 she received a distributions equal to Amount 1 and
Amount 2 from Plan B and Plan C, respectively. Taxpayer A asserts that her
failure to accomplish a rollover within the 60-day period prescribed by section
402(c)(3) was due to Taxpayer A's mental condition which impaired her ability to
manage her financial affairs. Taxpayer A further represents that Amount 1 and
Amount 2 have not been used for any other purpose.

Taxpayer A was employed by State E. She participated in Plan B and Plan C,
both qualified under section 401(a) of the Code and maintained by Financial
Institution D. In late 2013, Taxpayer A decided to retire. Her retirement
preparations included having to complete several documents given to her by
State E's retirement division. Among these, were forms to request distributions
from Plan B and Plan C. On February 5, 2014, a distribution of Amount 1 was
made from Plan B. On February 6, 2014, a distribution of Amount 2 was made
from Plan C. Taxes totaling Amount 3 were withheld from the two distributions.
The 2 distributions, minus taxes withheld, totaling Amount 4, were directly
transferred to Account F, a nonretirement savings account with Financial
Institution G. Taxpayer A's required minimum distribution for 2014 was
Amount 5. The total of the two distributions, less Taxpayer's required minimum
distribution for 2014 was Amount 6.

Taxpayer A was age 75 at the time of her retirement living alone in State E.
English was not her first language and, while alive, her husband handled the
financial affairs. Taxpayer A requested help in completing the forms but was told
by the plan administrators that they were not allowed to counsel or give any tax
advice. Soon after receiving the distributions, Taxpayer A moved to State H to
live with her daughter. Her daughter as well as her physician in State E indicate
that Taxpayer A suffers from physical and cognitive disabilities, the
consequences of which were diminished mental capacity and forgetfulness. The
request is accompanied by a letter from a physician stating that Taxpayer A has
difficulty making simple decisions and is, in general, incapable of managing her
financial affairs.

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Based on the facts and representations, you request a ruling that the Internal
Revenue Service waive the 60 day rollover requirement contained in section
402(c)(3) of the Code with respect to the distribution of Amount 6.

Section 402(c) of the Code provides that if any portion of the balance to the credit
of an employee in a qualified trust is paid to the employee in an eligible rollover
distribution, and the distributee transfers any portion of the property received in
such distribution to an eligible retirement plan, and in the case of a distribution of
property other than money, the amount so transferred consists of the property
distributed, then such distribution (to the extent transferred) shall not be
includible in gross income for the taxable year in which paid. Section
402(c)(3)(A) states that such rollover must be accomplished within 60 days
following the day on which the distributee received the property. An individual
retirement account (IRA) constitutes one form of eligible retirement plan.

Section 402(c)(4) of the Code provides that an eligible rollover distribution shall
not include any distribution to the extent such distribution is required under
section 401(a)(9).

Section 402(c)(3)(B) of the Code provides, in relevant part, that the Secretary
may waive the 60-day requirement under sections 402(c) 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 402(c)(3)(B) of the Code.

Section 401(a)(31) provides the rules for governing "direct transfers of eligible
rollover distributions".

Section 1.401(a)(31)-1 of the Income Tax Regulations, Question and Answer-15,
provides, in relevant part, that an eligible rollover distribution that is paid to an
eligible retirement plan in a direct rollover is a distribution and rollover, and not a
transfer of assets and liabilities.

Revenue Procedure 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 402(c)(3) 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 by Taxpayer A is
consistent with her assertion that her failure to accomplish a timely rollover of

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Amount 6 was due to her deteriorating mental condition, which impaired
Taxpayer A's ability to manage her financial affairs during the 60-day rollover
period.

Therefore, pursuant to section 402(c)(3)(B) of the Code, the Service hereby
waives the 60-day rollover requirement with respect to distributions totaling
Amount 6 from Plan B and Plan C. Taxpayer A is granted a period of 60 days
from the issuance of this letter ruling to transfer an amount not to exceed Amount
6 into a rollover IRA. Provided all other requirements of section 402(c) of the
Code, except the 60-day requirement, are met with respect to such contribution,
the contribution will be considered a rollover contribution within the meaning of
section 402(c) of the Code.

This ruling does not authorize the rollover of 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.

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
(
or
)

Sincerely yours,

Carlton A. Watkins

Manager

Employee Plans Technical Group 1

Enclosures:

Deleted copy of ruling letter

Notice of Intention to Disclose

cc: