It is commonly known that an IRA distribution will not be taxable if the amount is rolled over into another IRA or other retirement plan no later than 60 days after the distribution (Section 408(d)(3) of the Internal Revenue Code, as amended).  Until recently, this 60-day rollover rule had been applied strictly regardless of whether the failure to comply was not caused by the taxpayer or would cause a hardship.  What is not generally known is that since the enactment of EGTRRA in 2001, the IRS is now permitted to waive the 60-day rollover requirement if the failure to waive would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to the 60-day rollover rule.  2003 IRS revenue procedure (Rev. Proc. 2003-16) provides that in determining whether to grant a waiver, the IRS will consider all relevant facts and circumstances, including (1) errors committed by a financial institution, (2) the inability to complete a rollover due to death, disability, hospitalization, incarceration, restrictions imposed by a foreign country or postal error, (3) the use of the amount distributed; and (4) the time elapsed since the distribution occurred.  A taxpayer applies for this hardship exception to the 60-day rule by the same procedure used for Service letter rulings.

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