[10879]
April 8, 1999
TO: PENSION MEMBERS No. 18-99
PENSION OPERATIONS ADVISORY COMMITTEE No. 24-99
RE: IRS RELEASE ON ROTH IRA CONVERSION CORRECTIONS
______________________________________________________________________________
The Internal Revenue Service has issued a release stating that it is receiving individual
tax returns reporting the conversion of traditional IRAs into Roth IRAs from taxpayers ineligible
to convert their IRAs. The release reminds taxpayers that if their income is above the $100,000
adjusted gross income (AGI) limitation they are not eligible to make a conversion. Taxpayers
that do not qualify for Roth IRA conversions have until the filing deadline, including extensions,
to correct these conversions by transferring the conversion amount (plus related earnings) back
to traditional IRAs in a recharacterization transaction.
Taxpayers who have already filed their tax return reporting a Roth IRA conversion and
who recharacterize by April 15 should file an amended return using Form 1040X and attach
Form 8606 to report the IRA transactions.
Russell G. Galer
Senior Counsel
Attachment
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