IRS Gets Tough on Blown 60-Day IRA Rollover

In  some instances, IRS has shown mercy to taxpayers who failed to complete an IRA rollover within the requisite 60 day timeframe.

IRS generally considers various factors in determining whether to waive the 60 day rollover requirement, including time elapsed since the distribution, inability to complete the rollover due to death, disability, hospitalization, incarceration, restrictions imposed by a foreign country, postal error, and, significantly, errors committed by a financial institution involved.

In PLR 201328036, however, IRS didn’t buy the assertion of financial institution error in failing to follow verbal instructions issued by the taxpayer.  The moral of the story – in IRA rollover matters and otherwise – taxpayers should provide written instructions to the financial institutions with which they are dealing.