IRA “Borrowings” – Only One Per Year!
Recall that the Internal Revenue Code provides that any amount distributed from an IRA is includible in gross income except in an instance where a distributee repays (i.e.- rolls over) the amount not later than the 60th day after the day on which the original distribution was made. The catch is, however, that a bloke can only do this once during a one year period.
So, along come Mr. and Mrs. Bobrow who made several distributions and repayments, which drew the attention of the Revenooers. The Bobrows claimed that the “one per year” rule applied to each separate IRA owned by an individual, rather than applying across all of a taxpayer’s IRAs. And along they went to the Tax Court, after the IRS made an issue out of the entire mess.
And the Court concluded that the plain language of the Code limits the frequency with which a taxpayer may elect to make a nontaxable rollover contribution. By its terms, the one year limitation set forth in the Code is not specific to any single IRA, but applied instead to all IRAs maintained by the taxpayer.
And as the filing season eases into position for 2014, be on notice that identity thieves are lurking around out there. Indeed, according to CNBC.com, the number one complaint to the Federal Trade Commission is identity theft. And in 2010, something like 15 percent of all identity theft complaints to the FTC dealt with tax returns. In 2013, that number soared to 43 percent!
For what it’s worth, IRS says this is a top priority for them – claiming they’re taking “new steps and strong actions to protect taxpayers and help victims of identity theft and refund fraud.” The Revenooers have more than 3,000 employees working on the problem – more than 35,000 employees who deal with taxpayers have been trained to recognize tax return fraud and to help beleaguered victims when the problem arises.
And from our “Bah Humbug” department comes word, this week, that the gigantic “farm bill” plowing through Congress will contain a provision for a 15 cent “fee” on every Christmas tree cut in or imported into the U.S. of A.
The Washington Times reports that the Christmas tree “fee” was first suggested three years ago by Obama (no surprise there), though public backlash forced reconsideration.
We hear the dough will to go fund a government-run board of industry representatives (who will do what, we wonder) and is designed to promote American Christmas trees.
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation.
Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd. with offices in Incline Village and Reno. He can be reached at 831-7288, welcomes comments at firstname.lastname@example.org, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.