Late Rollover Contribution for Military Death Benefit
Is it acceptable by the IRS to make a late election for military death benefits to be rolled over to a Roth IRA?
Background: Client received military death benefits 10 years ago. We were unaware of the special provision to roll these benefits to a Roth IRA within 1 year. Would it be acceptable to make a late contributions based on the reason the “financial institution made an error”
Thanks
Permalink Submitted by Alan - IRA critic on Thu, 2021-09-09 22:51
I don’t think any Roth custodian would accept this rollover without a PLR, and spending 20k for a PLR would probably only be wise if the actual nature of the error justified IRS consideration. Rev Proc 2003-16 would probably apply, not the later Self Cert Procedure released in 2016 (Rev Proc 2020-46) since the error pre dated that release by 5 years, custodian acceptance is required, and the certification must be filed shortly after discovery of the error. If the error is a failed notification, I don’t think the custodian is responsible for that. The IRS would be looking for an error of commission. But even with a detailed explanation of the error, it’s not possible to know how the IRS would view it in these unique circumstances.
Rev (irs.gov)