@irs-taxes wrote:
Hello,
I would like a response to my questions, below, Please.
Nobody here can give a legal opinion. You probably should consult your attorney.
This is what the IRS says in Pub 590-A
https://www.irs.gov/publications/p590a#en_US_2020_publink1000230570
[quote]
Rollovers completed after the 60-day period.
In the absence of a waiver, amounts not rolled over within the 60-day period don’t qualify for tax-free rollover treatment. You must treat them as a taxable distribution from either your IRA or your employer's plan. These amounts are taxable in the year distributed, even if the 60-day period expires in the next year. You may also have to pay a 10% additional tax on early distributions as discussed under Early Distributions in Pub. 590-B.
Unless there is a waiver or an extension of the 60-day rollover period, any contribution you make to your IRA more than 60 days after the distribution is a regular contribution, not a rollover contribution.
Example.
You received a distribution in late December 2020 from a traditional IRA that you don’t roll over into another traditional IRA within the 60-day limit. You don’t qualify for a waiver. This distribution is taxable in 2020 even though the 60-day limit wasn’t up until 2021.
Ways to get a waiver of the 60-day rollover requirement.
There are three ways to obtain a waiver of the 60-day rollover requirement.
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You qualify for an automatic waiver.
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You self-certify that you met the requirements of a waiver.
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You request and receive a private letter ruling granting a waiver.
How do you qualify for an automatic waiver?
You qualify for an automatic waiver if all of the following apply.
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The financial institution receives the funds on your behalf before the end of the 60-day rollover period.
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You followed all of the procedures set by the financial institution for depositing the funds into an IRA or other eligible retirement plan within the 60-day rollover period (including giving instructions to deposit the funds into a plan or IRA).
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The funds aren’t deposited into a plan or IRA within the 60-day rollover period solely because of an error on the part of the financial institution.
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The funds are deposited into a plan or IRA within 1 year from the beginning of the 60-day rollover period.
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It would have been a valid rollover if the financial institution had deposited the funds as instructed.
If you don’t qualify for an automatic waiver, you can use the self-certification procedure to make a late rollover contribution or you can apply to the IRS for a waiver of the 60- day rollover requirement.
How do you self-certify that you qualify for a waiver?
Pursuant to Revenue Procedure 2016-47 in Internal Revenue Bulletin 2016-37, available at IRB 2016-37, you may make a written certification to a plan administrator or an IRA trustee that you missed the 60-day rollover contribution deadline because of one or more of the 11 reasons listed in Revenue Procedure 2016-47. A plan administrator or an IRA trustee may rely on the certification in accepting and reporting receipt of the rollover contribution. You may make the certification by using the model letter in the appendix to the revenue procedure or by using a letter that is substantially similar. There is no IRS fee for self-certification. A copy of the certification should be kept in your files and be available if requested on audit.
Note.
A self-certification is not a waiver by the IRS of the 60-day rollover requirement. If the IRS subsequently audits your income tax return, it may determine that you do not qualify for a waiver, in which case you may owe additional taxes and penalties.
How do you apply for a waiver and what is the fee?
You can request a ruling according to the procedures outlined in Revenue Procedure 2003-16 and Revenue Procedure 2021-4. The appropriate user fee of $10,000 must accompany every request for a waiver of the 60-day rollover requirement (see the user fee chart in Appendix A of Revenue Procedure 2021-4).
How does the IRS determine whether to grant a waiver in a private letter ruling?
In determining whether to issue a favorable letter ruling granting a waiver, the IRS will consider all of the relevant facts and circumstances, including:
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Whether errors were made by the financial institution, that is, the plan administrator, or IRA trustee, issuer or custodian;
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Whether you were unable to complete the rollover within the 60-day period due to death, disability, hospitalization, incarceration, serious illness, restrictions imposed by a foreign country, or postal error;
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Whether you used the amount distributed; and
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How much time has passed since the date of the distribution.
Note.
The IRS can waive only the 60-day rollover requirement and not the other requirements for a valid rollover contribution. For example, the IRS can’t waive the IRA one-rollover-per-year rule.
For more information on waivers of the 60-day rollover requirement, go to RetirementPlans-FAQs.
Amount.
The rules regarding the amount that can be rolled over within the 60-day time period also apply to the amount that can be deposited due to a waiver. For example, if you received $6,000 from your IRA, the most that you can deposit into an eligible retirement plan due to a waiver is $6,000.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
