Rollover of Retirement Plan Self Certification for Additional Time

Normally you have 60 days to complete a retirement plan rollover in order to avoid current taxation and more importantly, penalization. One of the most ridiculous things I have had to do with my limited time on this planet in this life form is fight - REALLY FIGHT HARD - with our esteemed bureaucrats at the IRS to get penalties abated for elderly US Taxpayers subsiding on limited budgets who happened to inadvertently miss this 'rollover' deadline.

As a result of winning those fights over and over again the IRS finally got smart and released Revenue Procedure 2016-47.

Now if you have special circumstances challenging your ability to complete a rollover within the 60-day time frame there are several circumstances in which IRS systematically allows for additional time to complete the rollovers.

This relatively new 'Rev Proc' in tax geek speak allows for a self-certification statement which should be completed, signed and given to the financial institution receiving the rollover explaining your circumstances. That's it! Be sure to keep a copy of the statement in question along with the Rev Proc in case audited.

Accordingly taxpayers in general affected by one or more of 11 different events below are generally given more time to complete the rollover.  The events include:

  • An error was committed by the financial institution receiving the contribution or making the distribution to which the contribution relates.
  • The distribution, having been made in the form of a check, was misplaced and never cashed.
  • The distribution was deposited into and remained in an account that the taxpayer mistakenly thought was an eligible retirement plan.
  • The taxpayer’s principal residence was severely damaged.
  • A member of the taxpayer’s family died.
  • The taxpayer or a member of the taxpayer’s family was seriously ill.
  • The taxpayer was incarcerated.
  • Restrictions were imposed by a foreign country.
  • A postal error occurred.
  • The distribution was made on account of a levy under § 6331 and the proceeds of the levy have been returned to the taxpayer.
  • 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.

The contribution must be made to the plan or IRA as soon as practicable after the reason(s) listed no longer prevent the taxpayer from making the contribution. 

This requirement is deemed to be satisfied if the contribution is made within 30 days after the reason or reasons no longer prevent the taxpayer from making the contribution.

Contact me directly for more details on self certification or if you are facing challenges by a pesky IRS Revenue Agent.

John R. Dundon, EA [720-234-1177,] Enrolled with the United States Department of Treasury to Practice before the IRS (Enrolled Agent # 85353). Under contract with the IRS as a Certified Individual Taxpayer Identification Number (ITIN) Acceptance Agent. A Federally Authorized Tax Practitioner (USC 31 Section 330 + IRC 7525a.3.A) regulated under US Treasury Cir. 230.

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Posted in IRS Penalties, Retirement

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