Late Rollover Allowed For Taxpayer Who Had Previously Relied on Spouse for Financial and Tax Matters

In PLR 201835017 the IRS granted a taxpayer a waiver of the 60-day deadline to roll over a distribution she received from a qualified retirement plan.  She received this relief because she claimed she had previously relied on her spouse to handle all tax and financial matters, but the couple had separated during the 60-day period.

The facts are described in the private letter ruling as follows:

Taxpayer A participated in Plan B, a qualified plan maintained by her employer. In (Year), Taxpayer A retired from service with her employer. On Date 1, Taxpayer A withdrew Amount 1 from Plan B. On Date 2, a date within the 60-day rollover period, Taxpayer A deposited Amount 1, less amounts withheld for federal and state income taxes, into Account C. Account C is a non-IRA savings account maintained by Financial Institution D on behalf of Taxpayer A.

The taxpayer’s reason for asking for relief is described as follows:

Previously, Taxpayer A relied on her spouse to handle all financial and tax matters. However, on Date 3, Taxpayer A separated from her spouse. Thus, Taxpayer A missed the deadline for completing a timely rollover of Amount 2, a portion of total distribution Amount 1. Taxpayer A represents that Amount 2 has not been used for any other purpose.

In this case the IRS found that her reliance on her (apparently soon to be ex) spouse and his lack of availability after having separated was sufficient reason to allow the late rollover.