IRA Annuity Distribution Rollover Requirement Waived

Uniform Issue List: 408.03-00

In a letter dated September 4, 2011, as supplemented by correspondence dated April 17, 2012, you requested, through your authorized representative, 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 were submitted under penalty of perjury in support of your request for a waiver.

Taxpayer A represents that she received a total distribution of Amount D from IRA Annuity B, an individual retirement annuity within the meaning of section 408(b) of the Code, which was issued by Company L. Taxpayer A asserts that her failure to accomplish a rollover within the 60-day period prescribed by section 408(d)(3)(A) was due to an operational error by Company M in failing to establish an IRA as per Taxpayer A's instructions.

Taxpayer A is over the age of 70 1/2. On February 2, 2010, Taxpayer A surrendered IRA Annuity B and Amount D was wired to her bank account. On February 12, 2010, Taxpayer A wrote a check equal to Amount E and deposited it with Company M with the instruction that Amount E be used to open an IRA. However, due to a branch operational error, Amount E was deposited into Account C, a non-IRA account. Taxpayer A provided a letter from Company M explaining that it had mistakenly deposited the proceeds from IRA Annuity B into Account C. The mistake was discovered while preparing Taxpayer A's tax return for 2010, which was after the expiration of the 60-day period rollover period.

Amount E is an amount greater than Amount D. Taxpayer A asserts that the additional amount was used to round Amount D up to Amount E and may have come from a distribution from another IRA. However, Taxpayer A was unable to obtain any supporting documentation regarding the difference between the distribution from IRA Annuity B, Amount D, and Amount E, and therefore requests consideration only of Amount D.

Based on the above facts and representations, you request that the Internal Revenue Service (the "Service") waive the 60-day rollover requirement with respect to the rollover of Amount D from IRA Annuity 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.

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:

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 of the Treasury may waive the 60-day requirement under section 408(d)(3)(A) and (D) 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).

Revenue Procedure 2003-16, 2003-4 I.R.B. 359, provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to section 408(d)(3)(I) 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 and documentation submitted by Taxpayer A is consistent with her assertion that she attempted to roll over Amount D into an IRA within 60 days from the date of distribution but that Company M mistakenly placed Amount E into non-IRA Account C. Taxpayer A discovered the mistake after the expiration of the 60-day period prescribed by section 408(d)(3) of the Code.

Therefore, pursuant to section 408(d)(3)(I) of the Code, the Service hereby waives the 60-day rollover requirement with respect to the rollover of distribution Amount D. Taxpayer A is granted a period of 60 days from the issuance of this ruling letter to contribute Amount D into a rollover IRA. Provided all other requirements of section 408(d)(3), except the 60-day rollover requirement, are met with respect to such contribution, Amount D will be considered a rollover contribution within the meaning of section 408(d)(3).

Please note that, pursuant to section 408(d)(3)(E) of the Code, this ruling does not authorize the rollover of Code section 401(a)(9) minimum required distributions.

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 that may be applicable hereto.

This ruling is directed solely to the taxpayer who requested it. Section 6110(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.

If you have any questions regarding this ruling, you may contact * * *.