Has Any "Regular Lay Person" Successfully Used a Waiver?

Updated on November 21, 2018
M.6. asks from Woodbridge, NJ
9 answers

I am in the process of rolling over an IRA to my work retirement since our work recently started offering that. One of the attorneys is also the Plan Administrator for our office. I self-drew the funds 58 days ago, rather than doing a direct roll-over (we had our reasons for doing this). I then started working with the Plan Administrator at the office to set up the account and the wire transfer to move the funds from my account, where they have been sitting, to the one through my work.

Well, due to delays on the PA's part, the rollover will not happen today (after he promised it would). Tomorrow and Wed I will be at the Rochester Mayo with my husband due to his cancer treatment and more testing. Thurs is a holiday (and too late, anyways).

Anyhoo - I'm pretty upset because obviously this could create a huge tax consequence for us PLUS I've got to get the money put somewhere, but you just can't make huge willy-nilly contributions to your retirement. It looks like the IRS has a waiver for just this possible exact purpose.

So, my question is has anyone actually successfully used a 60 day waiver with the IRS in a circumstance like this? Funds should definitely go through within the next 30 days and I haven't rolled anything over in the last 365 days . . . I don't want to get more upset about this if there is a solution, but I also don't want to bank on a solution that actually is more of an IRS pipe dream . . .

This is probably a long shot that someone here might know this, but I figured it wouldn't hurt to ask. I can't get a decent financial advisor on the phone today to help answer this for me either :(

Thanks for at least taking a look and super thanks if you have any info!!!!

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So What Happened?

**Hmmmm . . . what would even be the point of a waiver or even allowing 60 days to begin with if the money could never be cashed out and redeposited. You don't have to MOVE the money within 60 days (say, after leaving an employer or something), in what circumstance would a 60 day rule even apply?

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answers from Washington DC on

You should have left it or put it into an IRA-style account. The tax implications will be huge.
You can contact the IRS and ask them for help - but really? You withdrew the money and the IRS sees that as an early withdrawal and taxes will be owed on it.

Ask the IRS directly. You will be on hold a long time - but you REALLY need to talk with them. I would do it while I'm waiting at the Mayo clinic and get 'er done!

Good luck!

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answers from Boston on

Sorry I just saw this so this may be too late to be helpful. You are correct, there is a 60-day period in which you can receive a rollover distribution from a tax-qualified retirement plan and then deposit those funds with another plan without paying taxes and penalties on that.

The attorney you are working with who is the plan administrator is at fault here. As a plan fiduciary, he has a legal obligation to administer the plan in the interest of participants (you). If he made a mistake, gave you false or misleading information or made promises that he couldn't live up to and you acted in good faith, you may qualify for an automatic extension of the 60-day period. The automatic extension conditions are below my reply. If all of what I suggest below doesn't work, the plan administrator should work with you on the extension or should make you whole (the plan will carry error and omission insurance for this purpose) if you need to pay the penalties.

I think the safest bet is for you to put the money back in your old IRA or open a new IRA tomorrow, both of which are valid options for getting in under the 60-day window. Your current bank may offer an IRA that could ease the transfer. You can just dump it into a money market account short term. I know you're tied up tomorrow, but get on the phone when you have some waiting around time and get this done. Explain your situation and see what they can do to help you - it will be well worth it to not get hit with taxes and, if you are under age 59.5, the 10% early withdrawal penalty. You may need access to a printer and scanner or fax machine if you have to print forms, sign them and send them back (hopefully not needed but you never know). The clinic should have a business office that you can get access to while you're there. If you have a laptop that you can bring with you, scan in a copy of your license if you can before you go tomorrow so that if you have to transmit a copy of your ID, you already have a soft copy. This is why I'd go with your current bank, if they have an IRA, or your prior IRA. In both cases, you've already gone through the identification process required for anti-money-laundering requirements. Do everything you can to get this under the umbrella in a qualified retirement plan/IRA in under 60 days. You can worry about how to invest it for the long term when you do the rollover into the company retirement plan when it is ready to receive funds.

Here is a link to the self-certification process and model letter if you can't get this moved to an IRA in the next day. Given that you work for a law firm and they are the plan administrator, they should help you out with drafting and filing anything that you need to get this waived.


Good luck, both with this and your husband's appointment!

The financial institution receives the funds on your behalf before the end of the 60-day rollover period.
You followed all of the procedures set by the financial institution for depositing the funds into an IRA or other eligible retirement plan within the 60-day rollover period (including giving instructions to deposit the funds into a plan or IRA).
The funds are not deposited into a plan or IRA within the 60-day rollover period solely because of an error on the part of the financial institution.
The funds are deposited into a plan or IRA within 1 year from the beginning of the 60-day rollover period.
It would have been a valid rollover if the financial institution had deposited the funds as instructed.


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answers from Dallas on

Redeposit into original account or open new one TOMORROW! You don’t have to go from one directly to another as others are stating below, that is misinformation. However, the 60 days is for real, don’t mess with that. Get it put somewhere tomorrow, worry about putting it into the work account at a much later date. But again, find a way to handle it TOMORROW.

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answers from Abilene on

I’m sorry you’re in this predicament. My understanding is the same as B. Unless it goes from one retirement account to another, you are paying taxes on it.

You can check with the IRS to confirm if you can’t get your financial advisor on the phone.

Hope your hubby does well in his treatments. ❤️

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answers from New York on

Don't sit on hold on the phone, you'll waste time. Take a few minutes *tomorrow* (not Wednesday) and jump in your car and drive to see a financial advisor. You'll feel better! If you do not do it tomorrow it'll be next week and you'll have spent a week plus a holiday with it hanging over you.

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answers from Wausau on

The link below is to the IRS page outlining the circumstances and requirements for getting a 60 day waiver. There are 3 circumstances for getting one. In your case, I think you'd need to follow the steps for #3 - self certification. There are 11 different valid reasons given for missing the deadline. If none of those reasons apply, put that money back into your IRA account today, if it is still open.


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answers from Norfolk on

I've rolled over from 401k to an IRA.
The way I understand it - there are taxes involved any time you don't do a direct roll over.
It has to go from one type of retirement fund right into another - the check can not be made out to you - if it touches you in any way/shape or form - regardless of the amount of time - you pay taxes on it as if it were income.
So I don't know anything about a 60 day period or any sort of waiver.
My knowledge/info might be wrong or not up with what works in your state.
I hope I am wrong but I think you are going to have to pay a large amount of taxes on this.



answers from Portland on

Added: I apologize. I didn't understand your question. You're trying to meet a deadline so you don't have to pay taxes. So my answer doesn't fit. I deleted it.

I googled transferring money from IRA to work retirement fund and learned that one can take out money out before transfer is done. However, one has to put the money into the retirement account within 60 days. If the deposit happens more than 60 days out, one does have to pay taxes on it.

Militarymom6: do I understand your question about a waiver because by the time you can deposit the money will be past 60 days of when you withdrew the money?

After SWH if you change employers or retire you don't have to move IRA, 401k money, yes, but when you move the money you have to directly transfer it to a new IRA or a 401k. I could not move money from a retirement plan either before or after retirement. My retirement is a government pension. Maybe a business retirement is different tho I don't think so.

When I roll over a IRA OR 401k the money had to be directly deposited in the new account. If the money came to me first it would be taxable. And I would have to pay a penalty because it would be an early withdrawal.


answers from San Francisco on

This sounds like a question for your tax person, unless YOU are your tax person (?) Or, maybe call the IRS directly.

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