A "direct rollover" is a rollover to or from a qualified retirement plan (401(a), 401(k), 403(b), 457(b)), reported with code G on a Form 1099-R. There is no such thing as a direct rollover between two traditional IRAs or between two Roth IRAs. Movement of funds between like kind IRAs are nonreportable trustee-to-trustee transfers or are 60-day rollovers. If the original custodian reports a distribution on Form 1099-R, it has been treated as a 60-day rollover, not a trustee-to-trustee transfer.
The IRS made clear in Revenue Ruling 78-406 that trustee-to-trustee transfers between IRAs are neither a distribution nor a rollover and are not reportable.
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(This reference was written back when the one-rollover-per-year rule was a one-rollover-per-three-years rule, so substitute "one year" in each place where it refers to three years.)
