New Self-Certification Procedure for Missed Rollover Deadlines

Post Date: 9/7/16
Last Updated: 9/7/16


Cross References
• Rev. Proc. 2016-47

Any amount distributed from a qualified retirement plan or an IRA is excluded from income if it is transferred to an eligible retirement plan or IRA no later than the 60th day following the day of distribution. A similar rule applies to annuity plans, 403(b) plans, and 457 governmental plans. The IRS has the authority to waive the 60-day rollover requirement when 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 who fails to meet the 60-day rollover requirement. The IRS has in the past established a letter-ruling procedure for taxpayers to write to the IRS and request a waiver of the 60-day rollover requirement. The IRS has recently issued a new procedure for written self-certification for taxpayers requesting a waiver. The self-certification is not an automatic waiver by the IRS of the 60-day rollover requirement. However, a taxpayer may report the contribution as a valid rollover and assume that the 60-day rollover requirement is waived, unless later informed otherwise by the IRS.

Conditions for self-certification. To use the new self-certification procedure, the IRS must not have previously denied a waiver request with respect to a rollover of all or part of the distribution to which the contribution relates. The taxpayer must have missed the 60-day deadline because of the taxpayer’s inability to complete a rollover due to one or more of the following reasons:
a) An error was committed by the financial institution receiving the contribution or making the distribution to which the contribution relates.
b) The distribution, having been made in the form of a check, was misplaced and never cashed.
c) The distribution was deposited into and remained in an account that the taxpayer mistakenly thought was an eligible retirement plan.
d) The taxpayer’s principal residence was severely damaged.
e) A member of the taxpayer’s family died.
f) The taxpayer or a member of the taxpayer’s family was seriously ill.
g) The taxpayer was incarcerated.
h) Restrictions were imposed by a foreign country.
i) A postal error occurred.
j) The distribution was made on account of a levy under IRC section 6331 and the proceeds of the levy have been returned to the taxpayer.
k) The party making the distribution to which the rollover relates delayed providing information that the receiving plan or IRA required to complete the rollover despite the taxpayer’s reasonable efforts to obtain the information.

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