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IRA DISTRIBUTION ROLLOVER REQUIREMENT WAIVED.

AUG. 7, 2009

LTR 200944061

DATED AUG. 7, 2009
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2009-23941
  • Tax Analysts Electronic Citation
    2009 TNT 209-28
Citations: LTR 200944061

Uniform Issue List: 408.03-00

 

Date: August 7, 2009

 

 

Refer Reply To: SE:T:EP:RA:T3

 

 

LEGEND:

 

 

IRA X = * * *

 

Account D = * * *

 

Amount A = * * *

 

Date 1 = * * *

 

Date 2 = * * *

 

Company A = * * *

 

Company B = * * *

 

 

Dear * * *:

This is in response to a request you submitted on March 6, 2009, as supplemented by additional correspondence submitted on April 30, 2009, 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:

You are 78 years old. You assert that your failure to accomplish a rollover of Amount A within the 60-day period prescribed by section 408(d)(3) of the Code was due to your medical condition and the medical condition of your husband, for whom you are the primary care giver, which impaired your ability to accomplish a timely rollover.

You had an Individual Retirement Arrangement (IRA), IRA X, which was maintained by Company A. You document that you received a notice from Company A that IRA X needed to be "taken out" or distributed. On Date 1, you responded to this notice by going to Company A's office. While at Company A's office, you spoke with a Company A representative. This representative completed a distribution form for IRA X. At that time, you received a distribution of Amount A from IRA X. You deposited Amount A into Account D with Company B. Account D is a non-IRA account. You have stated that it was your intent to roll over Amount A within the statutorily required 60-day rollover period.

You did not become aware of your failure to properly execute a timely rollover of Amount A until Date 2. You have documented that you are the primary care giver of your husband. You have documented your health problems and the health problems of your husband. You have documented that Amount A has not been used for any other purpose.

Based on the facts and representations, you request a ruling that the Internal Revenue Service waive the 60-day rollover requirement with respect to the distribution of Amount A contained in section 408(d)(3) of the Code in this instance.

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)(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 section 408(d)(3)(A) 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.

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)(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 presented and documentation you submitted is consistent with your assertion that your failure to accomplish a timely rollover was due to your medical condition and the medical condition of your husband, for whom you are the primary care giver, which impaired your ability to accomplish a timely rollover.

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 A (less amounts described below) from IRA X. You are granted a period of 60 days from the issuance of this letter ruling to contribute Amount A 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 A (less amounts described below) will be considered a rollover contribution within the meaning of section 408(d)(3) 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 expresses no opinion as to whether IRA X satisfied the requirements of section 408 of the Code.

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).

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 address all correspondence to SE:T:EP:RA:T3.

Sincerely yours,

 

 

Frances V. Sloan, Manager,

 

Employee Plans Technical Group 3

 

Enclosures:

 

Deleted copy of letter ruling

 

Notice of Intention to Disclose
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2009-23941
  • Tax Analysts Electronic Citation
    2009 TNT 209-28
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