The Internal Revenue Service has offered some reprieve to individuals who receive a distribution from a retirement plan or an individual retirement arrangement (IRA) and inadvertently miss the 60-day time limit for rolling these amounts into another retirement plan or IRA.
Normally, an eligible distribution from an IRA or an employer’s retirement plan can only qualify for tax-free rollover treatment if it is contributed to another IRA or workplace plan by the 60th day after it was received.
A taxpayer who missed the 60-day deadline can qualify for a waiver if the IRS has not previously denied a waiver for the rollover and one or more of the following 11 circumstances apply to them.
”The dog ate my rollover check” is not one of the mitigating circumstances listed by the IRS, but may qualify as a “misplaced check.”
To be eligible for the self-correction described in Revenue Procedure 2016-47, the taxpayer must make a written certification to the plan administrator or IRA trustee that the contribution satisfies criteria listed in the Revenue Procedure. The contribution also must be made to the plan or IRA as soon as practicable after the mitigating circumstance is resolved.
The IRS provided a sample letter for taxpayers to use for written certification. The sample letter is available here.
In the course of examining taxpayer’s individual return, the IRS may determine that the taxpayer qualified for a waiver of the 60-day rollover requirement.