Inherited IRA
Beneficiary took lump sum distribution from an annuity, received the check, but did not cash it. Annuity company refuses to void the check and do a trustee to trustee transfer into an inherited IRA, claiming that once a death benefit claim has been made, the IRS will not allow it to be reversed/reinstated. Are there any prior cases on this?
Permalink Submitted by Alan Spross on Wed, 2007-09-12 22:15
No PLRs that I know of provide any relief at all for reversing the constructive receipt of a check in an ineligible rollover situation. Therefore, the only recourse would be against the insurance company if a case could be made that they mishandled a clear instruction from the beneficiary. There will not be any help from the IRS.
Perhaps nothing to be lost by attempting to return the check for transfer with a nice letter and an additional check to cover their costs if the insurer did not err in the first place. It’s a long shot, but the only downside is lost opportunity costs while the company holds the checks.