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IRS Issues Revenue Ruling to Simplify Validation of Incoming Rollover Contributions

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April 2014

The IRS issued Revenue Ruling 2014-9, which attempts to simplify the process of accepting trustee-to-trustee tax-free rollover contributions. The guidance establishes a procedure that administrators of receiving plans can use to more quickly and easily conclude that a potential rollover contribution is valid.

The guidance states that an administrator of a receiving plan can access the Department of Labor’s (DOL) EFAST2 database and use the sending plan’s most recent Form 5500 to verify the validity of the rollover contribution. When filing their plan’s Form 5500, plan administrators must enter codes on Line 8a to indicate the plan’s characteristics. For example, Code 3C must be entered to signify that the plan is not intended to be qualified under Code Sections 401, 403, or 408. The administrator of a plan receiving a rollover contribution can check Line 8a of the sending plan’s filing, and if Code 3C is not included on Line 8a, the receiving administrator may reasonably conclude that the incoming rollover contribution is valid. 

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