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Tax-free rollover

Rollover requirement waived for taxpayer who relied on spouse’s financial acumen

Rollover requirement waived for taxpayer who relied on spouse’s financial acumen

PLR 201612017 In a private letter ruling (PLR), IRS has waived the 60-day IRA rollover requirement for a spouse who erroneously relied on her spouse’s financial know-how. However, the other spouse wasn’t as lucky. His untimely IRA rollover got no relief because he couldn’t show that he intended to make a valid rollover. He deposited […]

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Tax Court – IRA owner’s guarantee of loan to IRA-owned corporation resulted in deemed distribution

Tax Court – IRA owner’s guarantee of loan to IRA-owned corporation resulted in deemed distribution

Thiessen, (2016) 146 TC No. 7 The Tax Court has held that a taxpayer’s personal guarantees of loans made to a corporation that he formed and that was owned by his individual retirement account (IRA) were prohibited under Code Sec. 4975 and resulted in a deemed distribution of all of the IRA assets. It also […]

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Court of Federal Claims – taxpayers’ “rollover as business startup” account wasn’t valid retirement plan

Court of Federal Claims – taxpayers’ “rollover as business startup” account wasn’t valid retirement plan

Powell v. U.S., (Ct Fed Cl 3/16/2016) 117 AFTR 2d ¶ 2016-515 The Court of Federal Claims has denied taxpayers’ claim for refund, rejecting their argument that their Individual Retirement Account (IRA) withdrawals were nontaxable distributions that were rolled over into a “Business Owners Retirement Savings Account,” or BORSA — essentially, a variation of a […]

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Tax Court – failure to report court-ordered IRA liquidation results in accuracy-related penalty

Tax Court – failure to report court-ordered IRA liquidation results in accuracy-related penalty

Navaid, TC Memo 2016-37 The Tax Court has ruled that a taxpayer who failed to report the court-ordered liquidation of his bank-held IRA for restitution payments was liable for the accuracy-related penalty for substantial understatements of income tax. Although the taxpayer was never notified of the court’s action and never received a Form 1099-R, the […]

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Surviving spouse/sole trustee of decedent’s trust granted rollover relief for IRA despite regs

Surviving spouse/sole trustee of decedent’s trust granted rollover relief for IRA despite regs

PLR 201606032 In a Private Letter Ruling (PLR), IRS has ruled that it would waive the 60-day rollover requirement for a taxpayer whose failure to timely roll over funds from her husband’s individual retirement arrangement (IRA) to her IRA was due to her emotional distress following the death of her husband and the stress of […]

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Rollover relief granted to taxpayer who suffered emotional distress following spouse’s death

Rollover relief granted to taxpayer who suffered emotional distress following spouse’s death

PLR 201606032 In a Private Letter Ruling (PLR), IRS has ruled that it would waive the 60-day rollover requirement for a taxpayer whose failure to timely roll over funds from her husband’s individual retirement arrangement (IRA) to her IRA was due to her emotional distress following the death of her husband and the stress of […]

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No rollover relief for taxpayer who tried to use IRA distribution to buy partnership interest

No rollover relief for taxpayer who tried to use IRA distribution to buy partnership interest

PLR 201547010 In a private letter ruling, IRS has refused to waive the 60-day rollover requirement for a taxpayer whose attempt to use an IRA distribution to buy an interest in a partnership failed because the IRA custodian couldn’t hold the interest—a mistake that the taxpayer did not learn of for almost a year. Although […]

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Top Year-End IRA Reminders from IRS

Top Year-End IRA Reminders from IRS

Individual Retirement Accounts, or IRAs, are important vehicles for you to save for retirement. If you have an IRA or plan to start one soon, there are a few key year-end rules that you should know. Here are the top year-end IRA reminders from the IRS: Know the contribution and deduction limits.  You can contributeup to […]

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IRS OKs annuity-generating rollover from employer defined contribution plan to its pension plan

IRS OKs annuity-generating rollover from employer defined contribution plan to its pension plan

PLR 201527041 In a private letter ruling (PLR), IRS has concluded that retirees may elect to make a plan-to-plan transfer of their account balance in their employer’s defined contribution plan to a defined benefit (pension) plan maintained by the same employer in order to begin receiving an annuity benefit from the transferee plan. The PLR, […]

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Payments From Qualified Pension Plans — What Are The Choices?

Payments From Qualified Pension Plans — What Are The Choices?

Regardless of their age, employees who are fortunate enough to be covered by a noncontributory qualified defined benefit (usually pension) plan would be well advised to check and see how and when they or their spouses or other beneficiaries will be entitled to a benefit. Here’s an overview of the essential rules. When payments may […]

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How employees of bankrupt airlines should report rollovers to IRAs

How employees of bankrupt airlines should report rollovers to IRAs

Ann. 2015-13, 2015-15 IRB In an Announcement, IRS has provided instructions on how airline employees and former employees should report certain amounts that they received in 2014 because they were participants in a bankrupt airline’s defined benefit plan, and that they rolled over to an IRA. Background. Section 1106 of the FAA Modernization and Reform Act […]

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Tax Court: IRA withdrawal to cover deposit to govt. annuity not tax-free rollover

Tax Court: IRA withdrawal to cover deposit to govt. annuity not tax-free rollover

Bohner, (2014) 143 TC No. 111 A fractured Tax Court has held that a taxpayer was required to include in income amounts that he withdrew from his traditional individual retirement account (IRA) in order to cover a deposit to the Civil Service Retirement System (CSRS) to increase his retirement annuity. The majority reasoned that rollover […]

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New Q&As Explain Single Distribution Rule For Retirement Plans

New Q&As Explain Single Distribution Rule For Retirement Plans

IRS has explained two important aspects of the new rule providing that when a taxpayer makes a retirement plan rollover to multiple qualified destinations, the amounts are treated as a single distribution for allocating pre- and after-tax contributions. The first is that a taxpayer can’t take a partial distribution of only after-tax amounts in a […]

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Congress Extends Charity IRA Rule Through Dec. 31 – Provision Is Retroactive to Jan. 1, 2014

Congress Extends Charity IRA Rule Through Dec. 31 – Provision Is Retroactive to Jan. 1, 2014

Congress Extends Charity IRA Rule Through Dec. 31 – Provision Is Retroactive to Jan. 1, 2014, as reported in the WS Journal. Congress has reauthorized tax breaks for charitable transfers from individual retirement accounts for 2014, but eligible taxpayers must move quickly if they want to make such gifts: The provision expires again as of Jan. 1, […]

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Charitable IRA Rollovers Could Get Reprieve

Charitable IRA Rollovers Could Get Reprieve

Charitable IRA Rollovers Could Get Reprieve – Many Expect Congress to Revive the Popular Provision Retroactively for 2014, as reported in the WS Journal. Congress ended the week poised to revive a popular tax provision that encourages charitable donations of individual-retirement-account assets. The charitable IRA rollover provision, which expired at the end of 2013, allowed […]

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Good News and Bad for Retirement Savers – It’s Cheaper to Roll Into a Roth IRA, but Harder for Your Heirs to Shield It From Taxes

Good News and Bad for Retirement Savers – It’s Cheaper to Roll Into a Roth IRA, but Harder for Your Heirs to Shield It From Taxes

Good News and Bad for Retirement Savers – It’s Cheaper to Roll Into a Roth IRA, but Harder for Your Heirs to Shield It From Taxes, as reported in the WS Journal. A pair of recent developments brings good news to those with 401(k) accounts—and bad news to those with individual retirement accounts. To take […]

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Taxpayer Given Extension To Recharacterize Erroneous IRA-To-Simple-IRA Rollover

Taxpayer Given Extension To Recharacterize Erroneous IRA-To-Simple-IRA Rollover

PLR 201446036 IRS has granted a taxpayer an extension of time under Reg. § 301.9100-1 and Reg. § 301.9100-3 to make an election to recharacterize (i.e., undo) an erroneous 2008 IRA-to-Simple-IRA rollover as a contribution to an IRA. The taxpayer got the extension because she relied on her advisor when she made the forbidden rollover. […]

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IRS Updates Safe Harbor Explanations To Send To Eligible Rollover Distribution Recipients

IRS Updates Safe Harbor Explanations To Send To Eligible Rollover Distribution Recipients

Notice 2014-74, 2014-50 IRB IRS has issued a notice that amends the two safe harbor explanations in Notice 2009-68, 2009-2 CB 423, that can be used to satisfy the requirement under Code Sec. 402(f) that certain information must be provided to recipients of eligible rollover distributions. The first safe harbor applies to distributions that are […]

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IRS provides guidance for applying the one-IRA-rollover-per-year rule

IRS provides guidance for applying the one-IRA-rollover-per-year rule

Ann. 2014-32, 2014-48 IRB; IR 2014-107 In an Announcement and an accompanying News Release, IRS has issued several additional rules to flesh out the application of the one-IRA-rollover-per-year rule that it announced earlier this year would go into effect on Jan. 1, 2015. One such rule is a transition rule for distributions made in 2015. […]

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IRS withdraws prop reg in light of changed position on one-rollover-per-year limitation

IRS withdraws prop reg in light of changed position on one-rollover-per-year limitation

Preamble to Prop Reg07/10/2014; Prop Reg § 1.408-4 In light of Bobrow, TC Memo 2014-21, a recent Tax Court decision that interpreted Code Sec. 408(d)(3)(B)’s one-rollover-per-year limitation in a manner contrary to a proposed reg, and IRS’s subsequent decision to adopt the Court’s interpretation, IRS has partially withdrawn the proposed reg at issue. In the […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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Member CA Bar Member Orange County Bar US Tax Court Attorney