IRS changes rules on IRA to IRA rollovers

It is the season, prior to the end of the year, for planning.

Many people are engaging in the practice of IRA Rollover toward year end for tax and other reasons.

Well if you are going to Rollover your IRA, make sure you are doing for the right reason.

Perhaps you want to get from under an old employer you are no longer working for 401K plan to reduce the cost in fees. Perhaps you simply want more control or more options by being the king of your domain. Some people rollover into programs or products with guarantees. These are usually offered by insurance companies and are back by the full clam paying ability of the carrier and the money set aside in reserves for this purpose.

Whatever the reason, you need to know what you are doing since there are rules and regulations, and they change from time to time so you better educate yourself or getting a good advisor to assist you. What you don't know can hurt you!

If you want to avoid doing the wrong thing and end up with a result that may surprise you, or might not be the one you hoped and planned for, you need to know about the "new additions" or the changes you need to know about.
So in the spirit of the holidays, here are the recent changes the IRS came up with, since they are always there to help (?)
 
In a recent United States Tax Court case, Bobrow v. Commissioner, the Tax Court ruled that all IRAs of a taxpayer should be looked at in aggregate when it comes to the one-rollover-per-year rule. Prior to this ruling it was widely accepted, as well as published in IRS publication 590, that the one-rollover-per-year applied to each IRA independently.

How it currently works

This example is provided for illustrative purposes only.

For instance, if an individual has two IRAs – IRA #1 and IRA #2 – and takes a distribution from IRA #1 that is rolled over into a new IRA (IRA #3), then no further rollovers can occur from IRA #1 or IRA #3 in the next year (as both IRAs "participated" in one rollover in a 1-year period already), but the taxpayer could theoretically still engage in a rollover from IRA #2 and still be eligible for the 60-day rule.

How it will work in January 2015

This example is provided for illustrative purposes only.

However, the new Tax Court decision says you cannot involve IRA #2 (or any other IRA) in an income-tax-free rollover within the one-year period that begins on the date the distribution from IRA #1. If the rule is violated, the contribution to the receiving IRA will be treated as regular contribution rather than a rollover contribution. This may result in an excess IRA contribution for the respective tax year.

Following the court decision the IRS issued Announcement 2014-15, stating their intention of enforcing the new aggregated one-rollover-per-year rule. However, they are allowing a grace period until January 1, 2015 before enforcement will begin.
As a reminder, the one-rollover-per-year rule applies only to indirect (60-day) IRA to IRA rollovers. 
Information in a March 2014 IRA newsletter implies that the limit will apply separately to indirect Roth IRA to Roth IRA rollovers. 
It appears that traditional, SEP, and SIMPLE IRAs would be aggregated for purposes of the rule. Please also keep in mind:

• There is no limit on the number of rollovers between an IRA and a qualified plan.
• There is no limit on the number of IRA to IRA transfers.
• It appears that there is no limit on the number of indirect traditional IRA to Roth IRA conversions. 

Since this looks a bit confusing, I suggest to have an Advisor who is familiar with these things assist you. 
Everyone has a specialty, we are not expected to know everything, so why don't you do as we would when faced with other problems. 
When the car breaks down, you take it to a mechanic. If you get are sick you get an appointment to see a Doctor. When considering a Rollover, you need to consult a specialist. An advisor who deals with IRAs and Roth IRAs on a regular basis and know about rollovers.

This information is provided for educational purposes only and isn't meant to promote the sell or purchase of any product.
I am not a CPA and do not intend nor dispense tax advise and these information is available on the IRS web site.