IRS written determination 201437030

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 EXEMPT AND
GOVERNMENT ENTITIES
DIVISION
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224
JUN 0 5 2014
Uniform Issue List: 408.03-00
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Legend:
Taxpayer A
IRAB
Financial Institution C
Amount 1
Amount 2
Amount 3
Dear XXXXXXXXXXXXXX:
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201437030
This is in response to your request dated August 14, 2013, in which you request a
waiver
of the 60-day rollover requirement contained in section 408(d)(3) of the Internal
Revenue Code ("Code").
The following facts and representations have been submitted under penalty
of perjury in
support of the ruling requested:
Taxpayer A received a distribution from IRA B totaling Amount
1. She failed to
accomplish a rollover
of Amount 1 within the 60-day period prescribed by section
408(d)(3)
of the Code due to her temporary use of the distributed funds to finance the
purchase
of a new home and her inability to replace Amount 1 within the 60-day period.
On March 13, 2013, Taxpayer A withdrew Amount 1 from IRA
B, an individual
retirement account ("IRA") as defined in section 408(a)
of the Code, maintained by
Financial Institution
C. The funds were withdrawn specifically for the purpose of using
them as a short term loan to purchase a new residence with her husband. Taxpayer A
intended to roll over Amount 1 back into IRA B within the 60-day rollover period.
Taxpayer A was able to complete a partial rollover totaling Amount 2 but was unable to

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201437030
complete the rollover of the distribution totaling Amount 3 because the sale of their
existing residence and another property they owned was not complete before the end of
the 60-day rollover period. Taxpayer A stated that it was out of her control as to when
the sale
of these properties was completed. While Taxpayer A further stated that her
intention was to roll over the full distribution
of Amount 1 back into IRA B at Financial
Institution
C, Taxpayer A undertook the transaction with knowledge of using the
distributed funds as a short term loan.
Based on the facts and representations, you request a ruling that the Internal Revenue
Service ("Service") waive the 60-day rollover requirement with respect to the distribution
of Amount 3 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) 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)
of the Code).
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)(0)
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) where the failure to waive

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201437030
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).
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
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 Service has the authority to waive the
60-day requirement for a distribution from an
IRA where the individual failed to complete a rollover to another IRA within the 60-day
rollover period but was prevented from doing so because one
of the factors enumerated
in Revenue Procedure 2003-16, for example, errors committed by a financial institution,
death, hospitalization, postal error, incarceration, or disability. Taxpayer A has asserted
that she took a distribution totaling Amount 1 from
IRA B to secure the purchase
of a
new residence.
In effect, Taxpayer A made a short term loan when she withdrew
Amount 1 from IRA B to purchase the residence. Accordingly, Taxpayer A has not
alleged that any
of the factors enumerated in Revenue Procedure 2003-16 prevented
her from timely completing the rollover.
Therefore, pursuant to section
408(d)(3)(1)
of the Code, the Service hereby declines to
waive the 60-day rollover requirement with respect to the distribution
of Amount 3 from
IRA
B. Thus, any contribution of Amount 3 into a rollover IRA following the distribution
of Amount 1 will not be considered a valid rollover contribution because the 60-day
requirement under section 408(d)(3) with respect to such contribution was not satisfied.
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 ruling 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.
Pursuant to a power
of attorney on file with this office, a copy of this letter ruling is being
sent to your authorized representative.
The information presented and documentation submitted by Taxpayer A
is consistent
with his assertion that his failure to accomplish timely rollover was due to the failure
of
Financial Institution C to follow his instructions, which resulted in Amount 2 being
deposited into IRA F
on November 26, 2010, twelve days after the end of the 60-day
waiver period.

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If you wish to inquire about this ruling, please contact XXXXXXXXXXXXX (Identification
No.
XXXXXXXXXXX) at (XXX) XXX-XXXX. Please address all correspondence to
SE:T:EP:RA:T1.
Enclosures:
Deleted copy
of letter ruling
Notice of Intention to Disclose
Carlton A Watkins, Manager
Employee Plans Technical Group 1