sample PLRs about custodian errors

Where might I find past PLRs that spoke to the topic of requesting an exception for custodian errors as it relates specifically to the custodian closing an inherited IRA and distributing the account (after withholding taxes) to the beneficairy?

Also, what resource might my client use for preparing her own request for a PLR?



You can search for written determinations on the IRS website here:  http://apps.irs.gov/app/picklist/list/writtenDeterminations.html

It’s difficult to find a PLR with the specific situation that you describe. IRS files them using a “uniform issue list” which starts with the Code Section the ruling relates to. Section 408 is for IRAs for example. If you do a search with 408 for example you find many items that relate to late rollovers instead of beneficiary accounts. Someone else may have a better method of searching. I got to IRS Written Determinations on the irs.gov website.

ThanksWhat resource would be used to prepare a request for PLR that a client intends on preparing and submitting herself?

Client should probably retain a tax specialist with PLR preparation experience, and pressure the custodian to pay for it strictly due to custodian error. This article indicates one such PLR that allowed a distribution to be “undistributed”: http://www.morningstar.com/advisor/t/66167738/distributions-and-undistributions.htm

Thank you for this link.Client ia a tax attorney and wants to consider submitting the request herself.   Can you offer a resource for submitting your own request for PLR?  Is there any prototype form(s) that are used in the submission?

I would recommend that the client contact someone who has done these before and ask them to review the submission. I beleive there is a revenue procedure that tells you the format to use. She should be able to distinguish her facts from any adverse court cases or published rulings – if she can find any. I’ve been told that there is a way to determine on the web which IRS individuals handle the rulings in a particular area of the law, then you can identify one of them and call to ask about minimum information that they’d like the request to include.-Good luck to her!

If she’s a tax lawyer, she or her firm has probably submitted some ruling requests.  She should be familiar with the revenue procedure.

Note that both the IRA custodian’s inclination to either pay for the PLR costs AND the chance of a positive decision on the PLR rest of the custodian being nearly totally responsible for the distribution check being issued. That should play into whether the PLR is filed at all as well as how the custodian is approached with respect to paying for it. As my prior link indicates, this is an area that the IRS almost never excuses the taxable distribution, so if the client contributed to a miscommunication in any way, the chances of success are extremely slim. Another issue here is whether the PLR cost is determined under the lower cost rollover rules or the general rules which would result in a cost of around 10k plus legal costs.

The ruling cited in the article to which Alan posted a link, PLR 201139011, is the only such ruling that I’m aware of.

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