IRS Provides Protection Against Upcoming Change In Rollover Rules

Executive Summary: Today, in Announcement 2014-32 (the "Announcement"), the Internal Revenue Service clarified the rules that will apply going forward when an owner of an individual retirement arrangement (IRA) seeks to roll over a distribution when a prior rollover has been made within the preceding one-year period.

In January of this year, the U.S. Tax Court decided Bobrow v. Commissioner, T.C. Memo. 2014-21 ("Bobrow"),in which it decided that the once-per-year limit on IRA rollovers that is imposed by the Internal Revenue Code (the "Code") prevents an individual from making more than one tax-free IRA-to-IRA rollover in any one-year period, even if the rollovers are made to or from (or to and from) different IRAs. Shortly after the Bobrow decision, the IRS issued Announcement 2014-15, 2014-16 I.R.B. 973, in order to address the way in which the Tax Court applied the one-rollover-per-year limitation of the Code. Announcement 2014-15 pointed out that Proposed