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Discussion:Waiver of 60 day IRA rollover requirement

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Discussion Forum Index --> Tax Questions --> Waiver of 60 day IRA rollover requirement


Mtmckeecpa (talk|edits) said:

7 June 2007
Anyone out there with recent experience and or knowledge about getting a waiver for a missed deadline on a 60 day IRA rollover?

Client withdrew IRA ($100k) on advice of their current/former financial planner to invest in a privately held stock deal.....client issued a 1099-R for 2006...now client finds out that they needed to roll the IRA to a 3rd party administrator to have a clean rollover, they relied on the financial advisor and ASSUMED that it was a clean IRA investment.

Any PLRs that are relevant? Plus, it has been about 10 months since the rollover happened?

Kevinh5 (talk|edits) said:

8 June 2007
did they have anything written from the financial advisor?

(even if not successful at this, the client might consider an E&O claim)

Solomon (talk|edits) said:

8 June 2007
Electronic Reading Room. Try Information Letters. I vaguely remember one analogous to this.

Kevinh5 (talk|edits) said:

8 June 2007
Solomon, there are new safe-harbor rules for exceeding the 60 days, one of the rules is that all the paperwork was filled out as an IRA, but the financial service didn't treat it correctly. This won't pass the safe-harbor.

Mtmckeecpa (talk|edits) said:

8 June 2007
Nothing in writing from the advisor, the client didn't know about the need for a trustee/fiduiciary to make the investement. She just assumed that since the advisor told her to request a distribution and make the investment with the IRA money that it was a clean rollover.

He definitely has or had E&O at the time.

Kritter (talk|edits) said:

24 January 2008
Mtmckeecpa-
 Did you have any luck with this?  I had a client call me last night with the same problem.  He wanted to take out his money out of 401k, put it in an IRA.  The check was cut in October, but he held on to it because of bad market.  Called his financial advisor a few weeks ago, and found out he was past 60 day mark.  He didn't realize he only had 60 days to roll it over.  He still has the check, and now doesn't know what to do.  I saw that he could possibly go for a PLR, but I am thinking it might be an excercise in futility, because his only excuse is he didn't know.

Mtmckeecpa (talk|edits) said:

25 January 2008
Kritter,

I told the client the ONLY relief available to them was to request a PLR, otherwise, taxable in year of distribution subject to 10% penalty.

Client didn't agree with me and didn't want to pay for a PLR, so they found another firm that filed their return showing a qualified rollover. Flat out wrong, nothing to support the position of a qualified rollover.

Journal of Financial Planning

The above link is interesting reading on waivers...good luck to you!

Kritter (talk|edits) said:

25 January 2008
Mtmckeecpa-
 Thank you so much for the article- it was interesting.  My plan was to do the same as you- advise him of the PLR, and let him decide if he wants to do it. Thanks again.

DZCPA (talk|edits) said:

25 January 2008
Can you void out the check? Would that then make it an non event since the funds never left the IRS?

Kritter (talk|edits) said:

27 January 2008
We thought of that, but we didn't think that would fly. Plus, the 1099 has already been issued, so that would have to be corrected too.

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