You may recall my blog post from September 2016 that discussed the August 24, 2016, release of Revenue Procedure 2016-47, which announced a taxpayer may self-certify the reason for submitting a late IRA rollover. In this Revenue Procedure, the IRS stated that changes to Form 5498 would soon follow, and those changes are now.
During December of 2016, the IRS released the "2017 Instructions for Forms 1099-R and 5498" to reflect the allowable changes for reporting a late rollover contribution.
Although an IRA trustee that accepts a rollover contribution after the 60-day deadline has always reported the postponed contribution in boxes 13a, 13b, and 13c of Form 5498, the instructions for the new form added “late rollover with self certification” as one of the reasons for the postponement. The new code to indicate the self-certification is “SC”. It should be noted that the new self-certification procedure is effective on August 24, 2016. However, unlike the 2017 version the instructions for the 2016 Form 5498 do not address late rollover contributions received in 2016.
As always, taxpayers should seek guidance from their personal tax advisors in submitting a late rollover and self-certifying the late contribution so that the specific situation is accurately relayed to the IRA trustee. If correctly reported, the taxpayer’s Form 5498 should reflect the SC code to identify the late rollover by self-certification, thus avoiding inadvertent taxation (subject to IRS audit) of the IRA distribution.
If you have questions, please contact the Retirement Strategies Group directly at (800) 722-2333, ext. 3939, or send an e-mail to RSG@PacificLife.com.
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