🚨BREAKING: HUGE NEWS FROM IRS ON RMDS!🚨
TL/DR version: ALL unwanted 'RMDs' eliminated by the CARES Act taken in 2020 can now be returned up through August 31st.
Here's the text via IRS Notice 2020-51👇
And now for some more detail...
Notice 2020-51 solves ALL the problems that people may have run into when trying to roll back unwanted 2020 'RMDs'.
First of all, the 60-Day window rollover window is extended to the later of 60-days after a distribution was received, or August 31st.✅
Next issue... the once-per-year rollover issue. Well, apparently, that's no longer an issue either. Notice 2020-51 says that the IRS will not count the rollover as a rollover for purposes of the once-per-year rollover rule.
To be clear, there is ABSOLUTELY NO LEGAL BASIS...
...for the IRS to be doing this. It is in direct violation of the Tax Code, Tax Court decisions, and its own long-standing guidance via PLRs.
In short, the IRS is simply banking on the fact that people will like this, no one will complain, and so it can do what it wants🤨
How about for beneficiaries? They are also EXPLICITLY prohibited from completing 60-day rollovers under the law. But the IRS is also going to pretend as if that law does not exist either!
As such, ANY BENEFICIARY WHO TOOK AN RMD THIS YEAR CAN NOW REPAY IT until 8/31/20 too!
Here's the thing... This is ultimately the fair outcome for people who took 'RMDs' earlier this year, as they shouldn't be penalized for being proactive and complying with the RMD rules early during the year.
Fixing the law that doesn't allow it is Congress's job...
Allowing the IRS to unilaterally circumvent well-defined statute is a very slippery slope.
You may like the outcome this time, but what happens if the result next time is different?