RMD error

[Mister Met]

DB Plan. Participant over age 70 1/2 received a lump sum in 2015, with the RMD portion deemed to be not eligible for rollover. It was determined that due to an error on the administrator's part, $10,000 of the payment that was deemed to be an RMD and not eligible to be rolled over was in fact NOT an RMD and could have been rolled over. Participant received a 1099 for this payment. How could a situation like this be rectified?

[jpod]

I am not going to look it up and study it myself, but there is a rule whereby the 60-day rollover period can be waived in certain circumstances. If anyone who reads this Board knows those rules hopefully they will either confirm that it's worth looking into or explain why it can't be used in this situation. Short of that you can find it somewhere in IRC Section 402. With all that said I think you need IRS blessing for this via a private ruling and depending upon the user fee and other costs associated with that it may not be worthwhile just to defer the tax on $10,000.

[tymesup]

If the lump sum was paid in December of 2015, the participant might still be able to roll over the 10K and still be within 60 days.

[jpod]

I guess I sort of assumed that the 60-day window had closed, otherwise Mister Met wouldn't have asked the question.