3868. How is the 60-day time limit on rollovers applied?Nuco Employeercline202014-08-18T14:44:00Z2014-08-18T14:44:00Z36323603Albany Law School308422714Site Map/Individual Retirement Plans/Rollover/GeneralSite Map/Retirement Plans/Rollover/General IRA individual retirement account annuity2005-01-24T00:00:00ZTaxFactsDefaultArticle116990462-00-tf1.xml464.00;#1805;#2292;#0x010100C568DB52D9D0A14D9B2FDCC96666E9F2007948130EC3DB064584E219954237AF3900242457EFB8B24247815D688C526CD44D009C4E67E972694125ABDA91AC61F5E51FTax Facts 1How is the 60-day time limitation on rollovers applied?54800.0000000000TaxFactsDefaultArticle2010-01-14T23:14:00ZSBMEDIA\moss-admin3868. How is the 60-day time limit on rollovers applied?Once a distribution eligible for rollover treatment is received by a participant, the participant must make the rollover contribution within sixty days.IRC Sec. 402(c)(3). If more than one distribution is received by an employee from a qualified plan during a taxable year, the sixty day rule applies separately to each distribution.Treas. Reg. §1.402(c)-2, A-11.Planning Point: Required minimum distributions were waived for IRAs and defined contribution plans for 2009. If a person received a RMD for 2009, the person had until the later of the normal 60-day rollover period or November 30, 2009 to complete a rollover of the RMD.The IRS has the authority to waive the sixty day requirement where failure to waive it would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to the requirement.IRC Sec. 402(c)(3)(B).The IRS has issued guidelines for requesting a waiver of the sixty day requirement.See Rev. Proc. 2003-16, 2003-1 CB 359. Under the guidelines, a taxpayer may request a private letter ruling from the IRS waiving a failure to meet the sixty day requirement. The IRS will consider “all relevant facts and circumstances,” such as whether financial institutions committed any errors; whether an incomplete rollover was due to death, disability, hospitalization, incarceration, or postal error; how an amount distributed was used by the taxpayer, including whether a check was cashed; and how much time has elapsed since the distribution. The guidelines grant automatic waivers in cases where the failure to timely complete a rollover is “solely due to an error on the part of the financial institution.” If the taxpayer followed the institution’s required procedures within the sixty day rollover period, and the error is ultimately corrected within one year of the distribution, no waiver request is necessary.The IRS has liberally applied the new guidelines, granting waivers for alcohol and drug treatment, blizzards, bank errors, dementia, health problems, hurricanes, mistakes of fact including confusing an IRA distribution for a life insurance or annuity payment, and mistakes of law such as not understanding the tax consequences of the distribution.Let. Ruls. 200611038, 200610025, 200606053, 200606052. The IRS has denied waivers where a taxpayer used a distribution as a short term loan and made no actual attempt to roll over the distribution within the sixty day limit.Let. Ruls. 200544027, 200544030.Prior to EGTRRA 2001, no waivers of the sixty day time limit were permitted, even where the failure to meet it was the result of mistake, erroneous advice, the inaction of third parties, or reliance on prior rulings by the IRS itself.See e.g., Orgera v. Comm., TC Memo 1995-575; Let. Ruls. 9826036, 9211035, 9145036.Where a stock certificate representing the participant’s distribution was sent by registered mail but the participant was away from home, the sixty day period did not begin until the taxpayer signed the registered mail claim check at the post office and took physical receipt of the stock distribution.Let. Rul. 8804014. Likewise, the sixty day period began on the taxpayer’s receipt of a distribution check even though the check had been issued ten months earlier but delivery was delayed because of an incorrect address.Let. Rul. 8833043.The sixty day period does not include any period during which the amount transferred to the individual is a frozen deposit that cannot be withdrawn because of the bankruptcy or insolvency of the financial institution or any state-imposed requirement based on the bankruptcy or insolvency or threat the bankruptcy or insolvency of institutions in the state. Also, the sixty day period will not be considered to expire any earlier than ten days after the account ceases to be frozen.IRC Secs. 402(c)(7)(A), 403(a)(4)(B), 403(b)(8)(B), 408(d)(3)(F), 457(e)(16)(B).The inclusion of a distribution as income is not deferred into another calendar year merely because the sixty day rollover period extends into the succeeding year.Robinson v. Comm., TC Memo 1996-517.A timely rollover occurred where a corrective bookkeeping entry was made after the sixty day period but, based on the facts of the case; the Tax Court concluded that the transfer itself actually had occurred within the required period.Wood v. Comm., 93 TC 114 (1989). A letter ruling waived the sixty day rollover period for transfers between IRAs where a financial institution was closed on the sixtieth day, a Sunday, and the rollover was completed on the following day.Let. Rul. 200930052.