79 FR 133 pgs. 40031-40032 - Individual Retirement Plans and Simplified Employee Pensions; Partial Withdrawal
Type: PRORULEVolume: 79Number: 133Pages: 40031 - 40032
Pages: 40031, 40032Docket number: [REG-209459-78]
FR document: [FR Doc. 2014-16281 Filed 7-10-14; 8:45 am]
Agency: Treasury Department
Sub Agency: Internal Revenue Service
Official PDF Version: PDF Version
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-209459-78]
RIN 1545-BL98
Individual Retirement Plans and Simplified Employee Pensions; Partial Withdrawal
AGENCY:
Internal Revenue Service (IRS), Treasury.
ACTION:
Partial withdrawal of notice of proposed rulemaking.
SUMMARY:
This document withdraws part of a notice of proposed rulemaking that specifically relates to rollovers from individual retirement arrangements (IRAs). The partial withdrawal of the proposed regulation will affect individuals who maintain IRAs and financial institutions that are trustees, custodians, or issuers of IRAs.
DATES:
As of July 11, 2014, the proposed amendment to § 1.408-4(b)(4)(ii), published Tuesday, July 14, 1981 (46 FR 36198), is withdrawn.
FOR FURTHER INFORMATION CONTACT:
Vernon S. Carter at (202) 317-6700 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
Section 408(d) governs distributions from IRAs. Generally, section 408(d)(1) provides that any amount distributed from an IRA is includible in gross income by the payee or distributee. Section 408(d)(3)(A)(i) allows a payee or distributee of an IRA distribution to exclude from gross income any amount paid or distributed from an IRA that is subsequently paid into an IRA not later than the 60th day after the day on which the payee or distributee receives the distribution. Section 408(d)(3)(A)(i) and (d)(3)(D)(i). Section 408(d)(3)(B) provides that an individual is permitted to make only one nontaxable rollover described in section 408(d)(3)(A)(i) in any 1-year period.
[top] On July 14, 1981, the Federal Register published proposed regulations (46 FR
Based on the language in section 408(d)(3)(B), a recent Tax Court opinion, Bobrow v. Commissioner, T.C. Memo. 2014-21, held that the limitation applies on an aggregate basis. Thus, under Bobrow, an individual cannot make an IRA-to-IRA rollover if the individual has made an IRA-to-IRA rollover involving any of the individual's IRAs in the preceding 1-year period. The IRS intends to follow the opinion in Bobrow and, accordingly, is withdrawing paragraph (b)(4)(ii) of § 1.408-4 of the proposed regulations and will revise Publication 590. This interpretation of the rollover rules under section 408(d)(1)(B) does not affect the ability of an IRA owner to transfer funds from one IRA trustee or custodian directly to another, because such a transfer is not a rollover and, therefore, is not subject to the one-rollover-per-year limitation of section 408(d)(3)(B). See Rev. Rul. 78-406, 1978-2 C.B. 157.
In response to comments expressing concern over implementation of the rollover limitation as interpreted in Bobrow, the IRS released Announcement 2014-15, 2014-16 I.R.B. 973, on March 20, 2014. Announcement 2014-15 addresses the application to Individual Retirement Accounts and Individual Retirement Annuities of the one-rollover-per-year limitation of section 408(d)(3)(B) and provides transition relief for owners. Consistent with that Announcement, the IRS will not apply the Bobrow interpretation of section 408(d)(3)(B) to any rollover that involves a distribution occurring before January 1, 2015.
List of Subjects in 26 CFR Part 1
Treatment of distributions from individual retirement arrangements.
Partial Withdrawal of Proposed Rulemaking
For the reasons stated in the preamble and under the authority of 26 U.S.C. 7805, the Internal Revenue Service withdraws the proposed amendment to § 1.408-4(b)(4)(ii).
John Dalrymple,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2014-16281 Filed 7-10-14; 8:45 am]
BILLING CODE 4830-01-P