Correcting IRA distributions - IRS Procedure?

[Guest TPAStacey]

I work with a CPA, JD that has a client whose wife, not realizing the tax implications, cashed out her IRAs and put them into a CD at her bank. The wife is over age 59.5 and maybe even over 70.5. She took the IRA distribution during October 2008 so we are clearly past the 60 day rollover period. Is there any way this client can put the money back into an IRA? From everything I've seen, its too late and what's done is done. The only upside is that the 10% penalty won't apply b/c of her age.

The CPA, JD believes they remember seeing something that indicated the IRS had a procedure where you can explain the circumstances and they'll let you put the money back into an IRA (i.e., but not a PLR).

I read a post on this board from March 29, 2002 that kind of addressed this same issue and nothing was mentioned about a special procedure, but wasn't sure if anything else has developed over the last 7 years.

Any help would be appreciated!

[jevd]

I work with a CPA, JD that has a client whose wife, not realizing the tax implications, cashed out her IRAs and put them into a CD at her bank. The wife is over age 59.5 and maybe even over 70.5. She took the IRA distribution during October 2008 so we are clearly past the 60 day rollover period. Is there any way this client can put the money back into an IRA? From everything I've seen, its too late and what's done is done. The only upside is that the 10% penalty won't apply b/c of her age.

The CPA, JD believes they remember seeing something that indicated the IRS had a procedure where you can explain the circumstances and they'll let you put the money back into an IRA (i.e., but not a PLR).

I read a post on this board from March 29, 2002 that kind of addressed this same issue and nothing was mentioned about a special procedure, but wasn't sure if anything else has developed over the last 7 years.

Any help would be appreciated!

Page 24 IRS PUB 590

These are the only exceptions otherwise a ruling request is required.

[Guest TPAStacey]

Thanks! That's just what I needed!