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ARTICLE · 22 AUGUST 2019

Back to Basics: IRS Issues Ruling About Failure To Cash A Distribution Check from A Qualified Retirement Plan

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In Revenue Ruling 2019-19, the IRS answered three basic questions about the consequences of an individual's failure to cash a distribution check from a qualified retirement plan

United StatesEmployment and HR
Jennifer Rigterink
Jennifer Rigterink
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In Revenue Ruling 2019-19, the IRS answered three basic questions about the consequences of an individual's failure to cash a distribution check from a qualified retirement plan. Uncashed checks arise in a number of contexts and questions on the taxation of uncashed checks should be carefully considered.

In the hypothetical posed by the IRS, Individual A received a fully taxable distribution check from a qualified retirement plan in 2019. Individual A took no action with respect to the distribution check (and did not make a rollover contribution with respect to any portion of the distribution check). The IRS confirmed the following consequences:

  • Gross income inclusion: As expected, the IRS confirmed that the amount of the distribution is includible in Individual A's gross income in 2019, explaining that Individual A's failure to cash the distribution check does not permit her to exclude the amount from gross income. The IRS noted that, for purposes of the

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