Retirement Plans FAQs relating to Waivers of the 60-Day Rollover Requirement
These frequently asked questions and answers provide general information and should not be cited as any type of legal authority. They provide the user with information responsive to general inquiries. Because these answers do not apply to every situation, yours may require additional research.
- Are there any automatic waivers of the 60-day rollover period?
- How do I obtain a waiver of the 60-day rollover requirement?
- How does IRS determine whether to grant a waiver?
- Who is eligible to request extensions of the 60-day rollover period?
- What information must I submit to obtain a waiver?
- How does the IRS process requests for extension?
- Is a request for extension subject to disclosure?
- Where do I send the request for a waiver?
The IRS waives the 60-day rollover requirement automatically only if all of the following apply:
- The financial institution receives the funds on your behalf before the end of the 60-day rollover period.
- You followed all the procedures set by the financial institution for depositing the funds into an eligible retirement plan within the
60-dayperiod (including giving instructions to deposit the funds into an eligible retirement plan).
- The funds are not deposited into an eligible retirement plan within the 60-day rollover period solely because of an error on the part of the financial institution.
- The funds are deposited into an eligible retirement plan within 1 year from the beginning of the 60-day rollover period.
- It would have been a valid rollover if the financial institution had deposited the funds as instructed.
If you do not qualify for an automatic waiver, you can apply to the IRS for a waiver of the 60-day rollover requirement.
To obtain a waiver, you must a request for a ruling pursuant to Revenue Procedure 2003-16 and Revenue Procedure 2014-4. The appropriate user fee must accompany every request for extension of the 60-day rollover period (see the user fee chart in Revenue Procedure 2014-8).
In determining whether to grant a waiver, the IRS will consider all relevant facts and circumstances, including:
- whether errors were made by the financial institution (in addition to those described under automatic waiver, above);
- whether you were unable to complete the rollover due to death, disability, hospitalization, incarceration, restrictions imposed by a foreign country or postal error;
- whether you used the amount distributed (for example, in the case of payment by check, whether you cashed the check); and
- how much time has passed since the date of distribution.
Only an individual initially eligible to roll over the distribution concerning which the extension is requested, or their legal representative, is eligible to request an extension of the 60-day rollover period. Thus, only IRA owners, plan participants and surviving spouses treated as distributees or payees of the distributions are eligible to roll over funds distributed from an IRA or a plan. As a general rule, a non-spouse beneficiary of an IRA holder or a qualified plan participant is not eligible to roll over a distribution received from either a plan or an IRA even if a distribution is made without the consent of the non-spouse beneficiary. Thus, a non-spouse beneficiary will not receive an extension of the 60-day rollover period.
Revenue Procedure 2014-4, Appendix A, contains a sample letter ruling request format. Appendix B contains a checklist of information that you should submit with ruling requests made under the revenue procedure. You should supply the following additional information when making a request for an extension:
a) Either the full name of the qualified retirement plan and the name of the employer which sponsors the plan, or the full name of the IRA holder and the name of the trustee/custodian of the IRA making the distribution;
b) If the request is being made on behalf of a surviving spouse (beneficiary) of an IRA holder or plan participant, a copy of the beneficiary designation and a copy of the death certificate;
c) If an IRA, the account number;
d) The amount(s) of the distribution(s);
e) The date(s) the distribution(s) was/were made;
f) The amount of federal and/or state taxes, if any, withheld from the distribution;
g) Form 1099R, if available;
h) A statement as to why the distribution(s) was/were made. The statement should indicate what was intended to be done with the distribution at the time of receipt, and should contain a description of what was actually done with the distribution including the name of the financial institution where the distribution was deposited, if applicable;
i) A detailed explanation as to why the 60-day rollover requirement was not met, such as:
- A description of any medical problems of the taxpayer and how the problems caused the failure to meet the 60-day requirement;
- A description of any erroneous information from, or mistake by, a financial institution. If the erroneous information was in writing, copies of the correspondence must accompany the ruling request. If possible, provide a letter from the financial institution that committed the error acknowledging responsibility,
- Descriptions of any other event(s) or causes that prevented the completion of the rollover within 60 days.
NOTE: If you are basing the request for extension on erroneous advice/information, an explanation as to how the information affected your ability to complete the rollover within the requisite 60-day period.
j) All documentation relevant to the hardship being claimed which prevented the timely completion of the rollover, including doctors’ statements or bills regarding any mental or medical impairment, copies of any correspondence to or from the doctor(s) and medical institutions, and copies of completed financial or institutional forms;
k) Evidence that you have not used the distributed funds (e.g., copies of bank statements, etc.);
l) State the name of the qualified retirement plan or IRA trustee/custodian where you intend to deposit the funds that are the subject matter of the ruling request if the IRS approves the request;
m) State your date of birth and whether you are 70 ½ or older. (If so, some of the funds distributed may be ineligible for rollover treatment because they are required to be distributed under the minimum required distribution rules of sections 408(a)(6) or 401(a)(9) – you may need to check with the holder of the IRA or plan administrator on this);
n) If this waiver request involves an IRA to IRA rollover, state whether the one rollover per year rule of section 408(d)(3)(B) of the Internal Revenue Code applies to the distribution which is the subject matter of the extension request.
o) A signed and dated perjury statement signed and dated by you as the taxpayer (not your representative) as follows:"Under penalties of perjury, I declare that I have examined this request, including accompanying documents, and, to the best of my knowledge and belief, the request contains all the relevant facts relating to the request and such facts are true, correct and complete."
p) The request for extension should state how long an extension you need to make the rollover (a request may be made for an extension of a period not exceeding 60 days as measured from the date of issuance of the letter ruling granting the waiver of the 60-day rollover period.
q) Powers of Attorney: If an authorized representative submits your request for extension, then you must submit a
Form 2848, Power of Attorney and Declaration of Representative, with the request.
The IRS will process requests for extension of the 60-day rollover period in the order received. However, requests that do not include the appropriate user fee and/or that do not comply with the procedural requirements described above will be returned to you.
The text of letter rulings is generally open to public inspection. The IRS makes deletions before it is made available for inspection. To help the IRS make any necessary deletions, a request for a letter ruling must be accompanied by a statement indicating the deletions desired ("deletions statement"). If you only want names, addresses and identifying numbers to be deleted you should state this in the deletions statement.
You should submit the information described above as a ruling request, accompanied by the appropriate user fee to the IRS at the following address:
Internal Revenue Service
Attention: EP Letter Rulings
P.O. Box 27063
Washington, DC 20038