IRA Distribution Mistake times two

Submitted by steve jackson on Wed, 2018-08-08 19:48

Client took out funds from TSP 12/2017- Unknown to me and totally against my advise and just found out yesterday after not showing for three appointments. We had direct IRA account set up to accept the transfer of the traditional portion of her TSP. She said she just deposited them in the bank. Since she was a young- 52 recent Widow. I was wondering if a PRL based upon mental stress may be a defense.
Also just showed up with the Roth portion of check dated 6/20/2017 but never cashed and check said voided after one year. We had a Roth set up to accept this as well. Any remedy for this epic blunder on her part.

I am reposting this because I could not tell if their was a reply? Said there was but I could not see it?
Sorry
Steve



Submitted by Alan - IRA critic on Wed, 2018-08-08 20:31

  • I think any TSP distribution must be made proportionately between the pre tax and Roth accounts, so these two dates appear to indicate that two distributions were requested 6 months apart and she would have received two checks each time. However, she would only receive one 1099R for each portion of the TSP. How were her 2017 taxes filed, and did the voided check restore the balance to the TSP. I think there are several issues here besides the rollover that need to be identified before attempting to complete a rollover under Rev Procedure 2016-47.  Check the procedure to see which reason for missing the 60 days will work best because the IRA custodian will have to be convinced the self certification is legit.
  • https://www.irs.gov/pub/irs-drop/rp-16-47.pdf

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