SECTION 5. APPLICATION

.01 If a contract described in section 4.01 of this revenue procedure is modified as described in section 4.02 of this revenue procedure, that modification is not treated as the exchange of property for other property differing materially in kind or extent for purposes of § 1.1001

1(a). For example, in the case of a debt instrument that is described in section 4.01 of this revenue procedure and that is modified as described in section 4.02 of this revenue procedure, the modification is not treated as a significant modification for purposes of § 1.1001-3, which provides rules for determining whether the modification results in an exchange of the original debt instrument for a modified debt instrument that differs materially either in kind or in extent for purposes of § 1.1001-1(a).

.02 If a contract described in section 4.01 of this revenue procedure is one leg of a transaction integrated under § 1.1275-6 or § 1.988-5(a), the modification of that contract as described in section 4.02 of this revenue procedure is not treated as legging out of the integrated transaction under § 1.1275-6 or § 1.988-5(a). If a contract described in section 4.01 of this revenue procedure is integrated under § 1.148-4(h), the modification of that contract as described in section 4.02 of this revenue procedure is not treated as terminating the qualified hedge under § 1.148-4(h). If a contract described in section 4.01 of this revenue procedure is part of a hedging transaction under § 1.446-4, the modification of that contract as described in section 4.02 of this revenue procedure is not treated as a disposition or termination of either leg of the transaction under § 1.446-4.

.03 If a contract described in section 4.01 of this revenue procedure is modified as described in section 4.02 of this revenue procedure (covered modification) and is contemporaneously modified in a manner not described in section 4.02 of this revenue procedure (noncovered modification), the regulations identified in sections 5.01 and 5.02 of this revenue procedure apply to the noncovered modifications without regard to the special rules provided in sections 5.01 and 5.02 of this revenue procedure. In addition, when applying each regulation identified in sections 5.01 and 5.02 of this revenue procedure, the covered modifications are treated as part of the terms of the contract prior to any modification that is not a covered modification. As a result, covered modifications are treated as part of the existing terms of the contract against which other contemporaneous, subsequent, or cumulative

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.02 Section 401(a)(31) requires that a plan qualified under § 401(a) provide for the direct transfer of eligible rollover distributions. A similar rule applies to § 403(a) annuity plans, § 403(b) tax-sheltered annuities, and § 457 eligible governmental plans. See §§ 403(a) (1), 403(b)(10), and 457(d)(1)(C). Section 1.401(a)(31)-1, Q&A-14, provides examples of situations in which a plan administrator may reasonably conclude that a contribution, whether made via a direct transfer or a 60-day rollover, is a valid rollover contribution to a § 401(a) or 403(a) plan. Several of the examples illustrate circumstances under which a plan administrator may rely on certain certifications and documentation that a rollover contribution that is not a direct transfer is being made no later than 60 days following receipt.

.03 An IRA trustee reports a rollover contribution received during a year on a Form 5498, IRA Contribution Informa- tion, for that year.

.04 Sections 402(c)(3)(B) and 408(d) (3)(I) provide that the Secretary may waive the 60-day rollover requirement “where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to such requirement.”

.05 Under §§ 7508 and 7508A, the time for making a rollover may be postponed in the event of service in a combat zone or in the case of a federally declared disaster or a terroristic or military action. See § 301.7508-1 and Rev. Proc. 2018-58, 2018-50 I.R.B. 990. Also, under § 402(c) (3)(C), the time for making a rollover of a qualified plan loan offset amount is postponed until the tax return due date (including extensions) for the taxable year in which the plan loan offset is treated as distributed.

.06 Rev. Proc. 2003-16, 2003-4 I.R.B. 359, establishes a letter-ruling procedure for taxpayers to apply to the Internal Revenue Service (IRS) for a waiver of the 60-day rollover requirement, under § 402(c)(3)(B) or 408(d)(3)(I). Section 3.03 of Rev. Proc. 2003-16 also provides for automatic approval for a waiver of the 60-day rollover requirement in certain circumstances in which a rollover is not

modifications are tested under the regulations identified in sections 5.01 and 5.02 of this revenue procedure.