Missed the 60-Day IRA Rollover Window? The IRS Has a New Formal Fix

Missing the deadline for an IRA rollover can turn an ordinary job change into a costly tax problem, but the IRS has introduced a formal process that may allow taxpayers to correct the issue before it affects their return.

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Imagine a 58-year-old saver who leaves a job, receives a $30,000 distribution from an old 401(k), and intends to move it into an IRA. A hospital stay interrupts the plan, and by the time she is able to act, the 60-day rollover period has passed. The check is then treated as taxable income.

Until recently, someone who wanted the IRS to review that kind of failure typically had to pursue a private letter ruling under Revenue Procedure 2003-16 and Revenue Procedure 2026-4. Revenue Procedure 2026-33, posted October 22, 2026, adds a new option. It establishes the IRA Voluntary Correction Program, or IVCP, as part of a broader IRA Compliance Resolution System, and it becomes effective May 1, 2027.

When the 60-Day Rule Is Missed, the Rollover Becomes Taxable

The revenue procedure puts it plainly: “Because the IRA Owner did not complete a timely rollover, the IRA Owner is subject to income tax on the amount of the distribution.” IRS Publication 590-A also says these amounts are “taxable in the year distributed, even if the 60-day period expires in the next year,” and an additional 10% tax on early distributions may apply as well.

For the example saver, assume she is younger than 59½ and the full amount falls into the 22% federal bracket:

Depending on where she lives, state income tax could increase the bill further. The bigger loss is lasting: the money no longer enjoys tax-deferred growth.

Who May Request IRS Relief for a Missed Rollover

For a rollover failure, “the Applicant cannot be an IRA Custodian. The Applicant must be the IRA Owner.” The owner “may designate an authorized representative to file an IVCP submission with the IRS on the IRA Owner’s behalf.”

The program is not limited to IRAs. It also covers distributions from “IRAs, section 401(a) qualified plans, section 403(a) annuity plans, section 403(b) tax-sheltered annuities, and governmental section 457(b) plans.”

An IRS specialist reviews “all relevant facts and circumstances,” including:

• “errors committed by a financial institution”
• “death, disability, hospitalization, incarceration, restrictions imposed by a foreign country, or postal error”
• how the money was handled, such as “whether the check was cashed”
• “the time elapsed since the distribution occurred”

A broker error is not required. A failure “does not need to have occurred due to an error by a Service Provider” to qualify. If the waiver is approved, the amount deposited is treated as a valid rollover contribution.

What an IVCP Filing Must Contain

The submission package must include:

1. The plan and sponsoring employer, or the IRA account number and custodian
2. The distribution amount and date
3. “the amount of federal or state taxes, if any, withheld”
4. “a copy of the associated Form 1099-R, if available”
5. An explanation of why the money was taken, what was supposed to happen to it, and what was actually done
6. “a detailed explanation as to why the 60-day rollover requirement was not met and copies of all supporting documents”
7. Where the rollover will be deposited if the waiver is granted

If relief from the 10% additional tax is also requested, “the request must be included in the IVCP submission.” The filing is made through Pay.gov, and if the user fee is not paid, “the IVCP submission will not be processed.”

Three Rollover Rules the Waiver Cannot Change

Amount limit. If the original distribution was $30,000, no more than $30,000 can be rolled back, minus any required minimum distributions that would have applied.

Same property. An IRA rollover “must consist of the same property distributed.” If shares were distributed, the shares can be rolled back, but “no proceeds from the sale of those shares can be rolled over.”

One rollover per year. An IRA-to-IRA rollover is not allowed if another one was made “in the prior one-year period.” That restriction “does not apply to trustee-to-trustee transfers or to conversions.”

Free Options to Review Before Paying the IRS

The earlier free remedies “remain available and are not affected” by IVCP, so they should be considered first.

An automatic waiver applies if the financial institution received the funds within 60 days, followed instructions, made the deposit late only because of its own mistake, and the deposit occurred “within 1 year from the beginning of the 60-day rollover period.”

Self-certification under Rev. Proc. 2020-46 involves sending a plan administrator or IRA trustee a written statement that identifies one of the approved reasons for missing the deadline. No IRS fee is charged. But Publication 590-A cautions that self-certification “is not a waiver by the IRS,” meaning an audit could still lead to “additional taxes and penalties.”

IVCP is designed to fill that gap with a compliance statement that is “binding upon the IRS.” Treasury is accepting public comments through January 20, 2027, so the details may still change before the program begins. With potentially large tax bills at stake, it may be wise to compare the free alternatives with a paid IVCP request with help from a CPA.