Past 60 day IRA rollover

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May 19, 2010 1:24 pm

I have a client that had three bank CD's in an IRA, recieved the distribution checks that she intended to rollover, then left the checks on her desk for over 60 days. The checks haven't been cashed. What is the best proceedure for getting an IRS rollover extension? Do you have suggested wording for the letter, or a form? BTW, she is over 59.

May 19, 2010 5:59 pm

Maybe she should lose the checks

May 20, 2010 7:10 am

I'm assuming the checks are payable to her?

Is she truly past the 60 days? The 60-day period begins the day after the IRA owner receives the
assets and is determined by the IRA owner. The ability to excercise control over the asset is the defining moment. IRC 408(d)3

If she can get the IRA Custodian to re-issue the distribution checks that would work. But she'd probably have to assert that the original checks were a mistake-in-fact.

If that's not happening (and it's unlikely), see IRS Revenue Procedure 2003-16 which lays out the steps required for a Private Letter Ruling granting a waiver of the 60 day rule.  It's a long shot since it requires that the IRS agree that an extension should be allowed
for “equity or good conscience,” for reasons including casualty,
disaster or other events beyond the taxpayer’s reasonable control.

May 20, 2010 12:48 pm

Josephus, thanks for the answer. I think we're going to go for the private letter ruling. The client seems to have just forgotten about the checks and left them in a pile on her desk. Her husband is very ill and she has been swamped at her work, so we'll use that as reasoning for the lapse of judgement. It's not a lot of money, but these are nice people with a decent account here and I'm trying to be of service.