The Service will be tightening the one-rollover-every-12-months rule.
In Feb., the Tax Court said that for taxpayers who have multiple IRAs, this rule applies on an aggregate basis to all IRAs, not on an IRA-by-IRA basis. So if a filer taps an IRA and timely rolls the funds back, he or she can’t withdraw funds from another IRA during the following 12 months and do another tax free rollover.
The problem is that the Court’s ruling conflicts with an IRS proposed regulation and Publication 590, both of which say the rule applies on an IRA-to-IRA basis. IRS will change its regulations to adopt the Court’s view, but the effective date will be delayed until Jan. 1, 2015. The more-lenient rule will apply to pre-2015 years