MRD in light of changes

[bzorc]

I have encountered a situation where a minimum required distribution for 2001 was calculated early in the year using the old MRD tables. Using the new (MDIB) table would have yielded an MRD approximately $11,000 less than using the old table. Client was advised to take the higher amount; now they are angry at having to pay the tax on the extra $11,000, and want to know if they can return it to the IRA saying the additional distribution was in error.

Has anybody dealt with this? Can the $$$ be returned? Any help would be appreciated!

[BPickerCPA]

You have 60 days to return it. Outside of that time limit you're stuck

[bzorc]

Thank you, Barry, that was my impression.

[Guest franky]

EGTRRA gives the IRS the authority to extend the 60-day rule. Perhaps this would be an area that IRS would consider. It's probably not worth the expense of getting a PLR, but IRS may give blanket approval when final regs are issued (hopefully soon).

[Appleby]

... the IRS may extend the 60-day period for participants who are unable to meet the deadline due to reasons beyond their control, such as casualties and natural disasters. I doubt that would apply here.

The IRS may however, grant exceptions to those who claim 'ignorance', through PLRs. Similar to what they are doing with those had had Roth IRA conversions and are now finding out they were ineligible to coverts.