The IRS has ruled that an IRA wasn’t an inherited IRA after the deceased IRA owner’s wife was appointed sole beneficiary by a state court. Before the state court ruling, the only beneficiaries were the children of the deceased. In a private letter ruling, the IRS stated that, because the wife is entitled to the proceeds of the IRA as the sole beneficiary, she is the individual for whose benefit the account is maintained. If the wife receives a distribution of the proceeds of the deceased’s IRA, she may roll over the distribution into one or more IRAs established and maintained in her name.
A recent audit reveals that the IRS’s Criminal Investigation (CI) should increase its role in enforcement activities involving identity theft. A Treasury Inspector General for Tax Administration (TIGTA) audit found that, from 2013 to 2017, the number of identity theft investigations initiated by CI declined 75%. Auditors found that many taxpayer-initiated incidents of identity theft weren’t placed in CI’s Scheme Tracking Referral System for consideration in its related process. “By not including these returns, CI may limit its ability to identify fraud characteristics for returns that bypass IRS filters for possible investigation,” TIGTA said. Read the report here: https://bit.ly/2jWTi1I