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March 20, 2014

Hot off the Presses: IRA Rollover Rule Changes Coming

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As you may know, a recent Tax Court opinion, Bobrow v. Commissioner, T.C. Memo. 2014-21, held that under the one-per-year rollover rule, all of an individual’s Traditional IRAs are treated as one Traditional IRA. As a result, if an individual rolls over a distribution from one Traditional IRA, that individual cannot rollover another distribution from any of his Traditional IRA within the next 12 month period.

This contradicts the IRS’ position in Publication 590. It also appears to contradict Internal Revenue Code § 408(d)(3)(B) (this is the big one in my opinion), and Proposed Regulation § 1.408-4(b)(4)(ii).  

I was in the process of writing an article about Bobrow v. Commissioner, T.C. Memo. 2014-21, when I received a copy of IRS Announcement 2014-15: Application of One-Per-Year Limit on IRA Rollovers from the IRS (today- March 20, 2014).

According to Announcement 2014-15, “The IRS anticipates that it will follow the interpretation of § 408(d)(3)(B) in Bobrow and, accordingly, intends to withdraw the proposed regulation and revise Publication 590 to the extent needed to follow that interpretation”. However, it also provides that … the IRS will not apply the Bobrow interpretation of § 408(d)(3)(B) to any rollover that involves an IRA distribution occurring before January 1, 2015”. This means that we have some time to get our ‘rollover house’ in order.

I will be discussing these and other rollover issues in the April to June issue of The IRA Authority. I will also provide a high level overview on this website for consumers. If you are a financial , tax or legal professional, you may find the information in The IRA Authority helpful.

Denise Appleby

Website: http://www.applebyconsultinginc.com/

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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