IRS Clarifies Stance on One-Per-Year IRA Rollovers

By Nevin Adams • 11/11/2014 • 0 Comments

The IRS issued a clarification Nov. 10 on the application of the one-per-year limit on IRA rollovers. In Announcement 2014-32, the IRS said it had received comments about the “administrative challenges presented by the Bobrow interpretation of §408(d)(3)(B).” 

In the announcement the IRS acknowledged that adoption of the Tax Court’s interpretation of the statute would require IRA trustees to make changes in the processing of IRA rollovers and in IRA disclosure documents, and that that will take time to implement. Accordingly, the IRS says it will not apply the Bobrow interpretation of §408(d)(3)(B) to any rollover that involves an IRA distribution occurring before Jan. 1, 2015. 

The IRS noted that, regardless of the ultimate resolution of the Bobrow case, the agency and the Treasury Department expect to issue a proposed regulation that will specify that the IRA rollover limitation applies on an aggregate basis. However, that regulation — when it does come — would not be effective before Jan. 1, 2015.

Our previous coverage of the one-rollover-per-year issue is here and here.

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