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Massachusetts Lawyers Weekly quotes Natalie Choate in “IRA rollover rule poses trap for lawyers, clients”

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Natalie Choate, a member of the firm’s Trusts and Estates Department, was quoted extensively by Massachusetts Lawyers Weekly in “IRA rollover rule poses trap for lawyers, clients” on July 21. The article discusses the U.S. Tax Court’s decision in Bobrow v. Commissioner, in which it rejected the IRS’s generous interpretation of the law limiting IRA rollovers to one per year, and said that in a 365-day period only one such transfer should be permitted per taxpayer regardless of how many IRAs the taxpayer owns. The IRS had long held, in published guidance and proposed regulations, that the restriction applied only on an IRA-by-IRA basis, but announced that it will embrace the Court’s new interpretation starting January 1, 2015.

Natalie notes that while the Tax Court upended a longstanding policy, it is not hard to avoid the problem by simply eschewing rollovers in favor of trustee-to-trustee transfers that are always tax-free without limitation. Natalie also points out that the case and resulting rule change underscore the tenuous nature of unofficial guidance from the IRS, which lawyers should not rely on. “Do not get your tax advice from IRS publications,” she said. “If you get in trouble, you cannot cite it as being authority. It’s not authority.”

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