Hardship exception to 60 day rollover requirement.

[DANRVAN]

I am looking for someone who has experience in PLR involving Code section 408(d)(3)(I). In this case, the exception is for death of spouse and rollover was made after 60 days. If anyone has experience with the hardship exception and wishes to kick it around, please respond.

Thanks.

[jainen]

>>death of spouse<<

IRS has been pretty sympathetic on this issue, following the code "where the failure to waive such requirement would be against equity or good conscience." For example, PLR 200906060 last February granted relief in the death of a spouse. The most relevant factors were the taxpayer's mental state and that the spouse had handled all household finances. The widow didn't even know the money was from an IRA until she got the 1099, but be careful of that because too much elapsed time is not allowed. Another important element is that she did not use the money, leaving it in a regular bank account until she was able to get her affairs in order.

On the other hand, IRS denied the mental condition argument last October (PLR 200840057). The taxpayer withdrew money after a heart attack to cover expected bills later paid by insurance. As always, good documentation is essential--and it must actually match up with the problems and timelines claimed, showing that the 60 day limit was indeed beyond the taxpayer's control.