Lots of people do, and the IRS has been tolerant of those who mess up and miss the 60-day deadline. No longer, according to this Wall Street Journal item (subscription):
Until recently, the IRS had a soft spot for people who broke the 60-day rule. If a person could show that he or she intended to complete the rollover within the specified period -- but had fallen victim to a bank's error, for example -- then the investor often was given time to complete the transfer without penalty.Wealth managers may need to warn some clients not to take the 60-day rule lightly.
More recently, though, says Ed Slott, an IRA consultant in Rockville Centre, N.Y., Uncle Sam has been denying requests for extensions. That's because investors, according to Mr. Slott, are using withdrawals for a variety of purposes and can't prove that "a true intent to do a rollover" existed in the first place.
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