I have a client who made a partial transfer of a 403(b) account into an IRA annuity contract (they are separated from service). The transfer went through but the client decided they would not accept the new contract and exercised their 20 day right of cancellation. The company wants to send the money directly to the client and they plan to roll the money over into another IRA account within 60 days. Is this allowed as they did not actually move the funds into the annuity account because they did not take it.

I don’t want them to be hit with taxes and penalties for rolling the same money over twice in the same 12 month period.