Waiver of 60-Day Rollover Rule
There are certain circumstances in which the 60-day rollover rule can be waived. If you think are in one of these specific situations, consult with your tax preparer for assistance.
Financial Institution Error
In Rev Proc 2003-16, 2003-4 IRB the IRS says it will automatically waive the 60-day rule for qualified plan and IRA rollovers if financial institution error caused the rollover to be untimely and several other conditions are met.
Criteria For Automatic Waiver
The 60-day rule is waived automatically if a financial institution's error caused the rollover to be untimely. The automatic waiver is granted only if ALL of the following apply:
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The financial institution received the funds on behalf of the taxpayer before the 60-day rollover period expires;
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The taxpayer followed all of the financial institution's procedures for depositing the funds into an eligible retirement plan within the 60-day period (including giving instructions to deposit the funds into an eligible retirement plan);
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Solely due to the financial institution's error, the funds are not deposited into an eligible retirement plan within the 60-day rollover period;
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There would have been a valid rollover, if the financial institution had deposited the funds as instructed; and
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The funds are actually deposited into an eligible retirement plan within one year from the beginning of the 60-day rollover period. (Rev Proc 2003-16, Sec. 3.03)
Criteria For Waiver Based On Facts and Circumstances
If the taxpayer does not meet the criteria for automatic waiver, but still believes that he or she meets the requirements due to the facts and circumstances of his or her situation, the taxpayer should consider whether any of the circumstances for self-certifying a late rollover (see below) can apply. If not, the taxpayer may wish to request a hardship exception to the 60-day rollover requirement using the procedures outlined in Rev. Proc. 2018-4 for letter rulings, accompanied by the required user fee.
Private Letter Ruling Process For Obtaining Waiver of the 60-Day Rule
Taxpayers who don't qualify for an automatic waiver of the 60-day rule, or none of the reasons described below for self-certifying apply, may be able to obtain a waiver by applying for a private letter ruling. See Rev. Procs. 2003-16 and 2022-4, Appendix D, where the sample letter ruling request can be followed. There is an IRS user fee for this type of private letter ruling. Effective February 1, 2016, the fee is $10,000. (Rev Proc 2016-8 Sec. 6.01(4))
Affected Plans
The 60-day waiver rules apply to distributions from an IRA, individual retirement annuity, a qualified plan under Code Sec. 401(a), a Code Sec. 403(b) tax-sheltered annuity, and a Code Sec. 457 eligible governmental plan. (Rev Proc 2016-8)