I've been made aware of a situation, friend of a friend kind of thing, I am not in direct contact with the individual. A woman in her 60s died, and left her brother a sum of money in an annuity, held within a trust. The annuity was a rollover from the deceased's 401(k). The brother, who is disabled, and has not filed any tax return for decades, panicked, and withdrew the money about 4 months ago. He's now aware that this money is taxed as ordinary income and his tax bill will be near $40K. Had he left it in the annuity, he should have been able to withdraw $9000 or so each year and pay no tax at all.
The question - does anyone here have experience requesting a waiver of the 60 day rollover rule? He should have been able to roll the money to a beneficiary IRA, but was completely ignorant of any tax laws, and did not know this. Is the IRS ever merciful in such circumstances?
JOE