Waiver of 60-day rollover requirement
My wife took an IRA distribution with the intention of doing a rollover within the 60 day requirement. She is in the early stages of Parkinson’s disease and Parkinson’s Dementia, thus forgot to do the rollover. This fact came to light as I was preparing our tax documents and noticed a 1099R. The 60 day period expired in early Jan 2011. Does anyone have any suggestions as to how we may qualify for a waiver of the 60-day rollover requirement. Should we rollover now and not get the exception, I believe we would have an excess contribution problem with severe penalties. Any advise would be greatly appreciated.
Permalink Submitted by Bruce Steiner on Wed, 2011-03-23 19:52
Under Section 402(c)(3)(B), for distributions after 2001, the IRS has discretion to waive the 60-day deadline “where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual ….”
If her illness prevented her from completing the rollover on time, she should be able to get the IRS to waive the deadline. We’ve obtained waivers of the deadline in about a half dozen cases.
The IRS charges a fee of $500 if the amount is under $50,000, $1,500 if it’s at least $50,000 but under $100,000, or $3,000 if it’s $100,000 or more. There will also be a few thousand dollars in legal fees to obtain the waiver.