IRS written determination 201423040

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
REVENIL ARES

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

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

MAR 1 2 2014

201423040

Uniform Issue List: 408.03-00

T: EP. RA.TZ

***

***

***

Legend:

Taxpayer

IRA X

Annuity

Amount

=

Insurance Agent

=

Financial Institution A

=

Financial Institution B

=

Dear *** ,

This is in response to your request dated May 10, 2012, as supplemented by
correspondence dated October 29, 2012, 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 represents that she requested a distribution from IRA X totaling
Amount. Taxpayer asserts that her failure to accomplish a rollover within the 60-day
period prescribed by section 408(d)(3) was due to an error committed by Insurance
Agent when submitting an annuity application to Financial Institution B, which led to

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Amount being placed in Annuity, a non-qualified annuity with Financial Institution B.
Taxpayer further represents that Amount has not been used for any other purpose.

Taxpayer represents that she withdrew Amount from IRA X, on March 10,
2009, with the intent to rollover Amount from IRA X to a Rollover IRA at Financial
Institution B in order to obtain better financial terms. Taxpayer consulted with Insurance
Agent regarding taking a lump sum distribution of Amount from IRA X instead of a direct
transfer of Amount from IRA X to a Rollover IRA at Financial Institution B in an effort to
expedite the rollover process and obtain the most favorable financial terms.

Taxpayer represents that she relied on Insurance Agent for many years
regarding similar transactions. During the time that Taxpayer signed the distribution
form to request a lump sum distribution of Amount from IRA X, she pre-signed and
partially completed Financial Institution B's annuity application form to request a Rollover
IRA at Financial Institution B. She requested that Insurance Agent complete the
remaining substantive sections of Financial Institution B's annuity application form.
Taxpayer represents that Insurance Agent inadvertently marked the incorrect plan
specifications on Financial Institution B's annuity application form. Specifically,
Insurance Agent marked non-qualified-cash versus qualified-rollover.

When Taxpayer received Amount from IRA X in the form of a lump sum
distribution check from Financial Institution A, Insurance Agent sent the distribution
check via expedited mail to Financial Institution B. Amount from IRA X was received by
Financial Institution B within 60 days of the initial lump sum distribution from IRA X.
Financial Institution B placed Amount in a non-qualified annuity per the Financial
Institution B's annuity application form. Taxpayer and Insurance Agent failed to
recognize that the annuity contract type was labeled non-qualified when a copy of the
contract was received by Taxpayer and subsequently when annual annuity contract
statements were received by Taxpayer.

Taxpayer became aware of the error committed by Insurance Agent, in April
2011.Taxpayer immediately notified Financial Institution B of the error and awaited a
correction of the error by Financial Institution B. Financial Institution B later informed
Taxpayer that they were unable to make a correction without a ruling from the Service.
Taxpayer also received a notice from the Service regarding a required adjustment to her
Federal Individual Income Tax Return for Amount from IRA X where Amount was
represented as a rollover contribution.

Taxpayer asserts that it was always her intention to rollover Amount to another
IRA. Taxpayer states that her intention to rollover Amount to another IRA is indicated by
her representations, with supporting documentation, that: (1) in the preceding year she
included Annuity, believing it to be in an IRA, in her 2010 required minimum distribution
calculation; (2) she included Annuity in her 2009 Federal Individual Income Tax Return
as a rollover contribution; and (3) she has not used Amount for any other purpose during
the relevant time period. 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.

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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 408(d)(3) of
the Code with respect to the distribution of Amount.

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 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)(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

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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, including
a statement by Insurance Agent admitting his error, are consistent with her assertion that
her failure to accomplish a timely rollover was caused by an error committed by
Insurance Agent.

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 from
IRA X. Taxpayer is granted a period of 60 days from the issuance of this ruling letter to
contribute Amount 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 will be considered a rollover contribution within the meaning of
section 408(d)(3) 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.

If you wish to inquire about this ruling, please contact *** (ID # *** ) at ***. Please
address all correspondence to SE:T:EP:RA:T2.

Sincerely yours,
Annan
Jason E. Levine, Manager
Employee Plans Technical Group 2

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