IRS Continues Leniency for Blown Timely IRA Rollovers

In a recent private letter ruling (PLR 201351031), IRS waived the 60 day rollover requirement in a case where the taxpayer’s failure to timely accomplish the task was due to her mental condition which impaired her ability to make decisions following her husband’s sudden death.  Consequently, the taxpayer was granted a 60 day extension from the date of the PLR to complete the rollover.

Noting that earlier pronouncements provided similar guidance, the Service observed that it 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, or hospitalization, incarceration, restrictions imposed by a foreign country or postal error; (3) the use of the amount distributed; and (4) the time elapsed since the distribution occurred.