Generally, distributions from a qualified retirement plan that are eligible for rollover must be rolled over within 60 days of the date on which the distribution occurs. If a taxpayer did not complete the rollover within 60 days, the taxpayer previously had to request a private letter ruling from the IRS to receive additional time to complete the rollover. In Revenue Procedure 2016-47, the IRS makes it easier for a taxpayer to rollover a qualified retirement plan distribution if the taxpayer misses the 60-day rollover window.
Under the new guidance, instead of applying for a private letter ruling, a taxpayer may complete a self-certification and provide it to the plan administrator or IRA trustee if the rollover was not completed due to one of reasons listed in the guidance. The taxpayer must make the contribution as soon as practicable after the reason no longer prevents the taxpayer from making the contribution. This requirement is deemed to be satisfied if the contribution is made within 30 days after the reason no longer prevents the taxpayer from making the contribution.
The following are the eleven situations that qualify for the self-certification relief:
- the financial institution receiving the contribution or making the distribution committed an error;
- the distribution was made in the form of a check which was misplaced and never cashed;
- the distribution was deposited into and remained in an account that the taxpayer mistakenly thought was an eligible retirement plan;
- the taxpayer’s principal residence was severely damaged;
- a member of the taxpayer’s family died;
- the taxpayer or member of the taxpayer’s family was seriously ill;
- the taxpayer was incarcerated;
- restrictions were imposed by a foreign country;
- a postal error occurred;
- the distribution was made on account of a levy under Section 6331 and the proceeds of the levy have been returned to the taxpayer; or
- the party making the distribution to which the rollover relates delayed providing information that the receiving plan or IRA required to complete the rollover despite the taxpayer’s reasonable efforts to obtain the information.
Further, the self-certification relief cannot be used if the IRS has previously denied a waiver request with respect to a rollover of all or part of the distribution to which the contribution relates.
Plan administrators or IRA trustees can rely on the self-certification unless they have knowledge of something that would contradict the self-certification. Revenue Procedure 2016-47 also includes a sample Certification for Late Rollover Contribution that may be used for this purpose.
If a taxpayer misses the 60-day deadline for a reason not included in Revenue Procedure 2016-47, the taxpayer may still request a private letter ruling from the IRS requesting relief from the 60-day rollover deadline.