As mentioned in my previous blog post, earlier this year the U.S. Tax Court ruled that the indirect IRA-to-IRA rollover rule allowing one rollover per 12 months applies on an aggregate basis (looking at all of a particular taxpayer's IRAs). At the time, the IRS had not commented on how it would implement this rule in light of the U.S. Tax Court's decision, but the time has come.
The IRS has stated through Announcement 2014-15 that "it will follow the interpretation of Section 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" regardless of the ultimate resolution of Bobrow (because the case may be appealed by Mr. Bobrow).
So what questions do you really need to have answered after the dust settles?
Ultimately, the bottom line is that you should not advise your clients to do an indirect IRA-to-IRA rollover if they don't have to. This will lead to less tax reporting (if processing a direct transfer) and fewer headaches if the client is in a position in which he/she actually needs to consider an indirect IRA-to-IRA rollover.
If you have any additional questions, please feel free to contact Retirement Strategies Group at (800)722-2333, ext. 3939, or e-mail us at RSG@PacificLife.com.
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