Roth IRAs.

• Author: Laffie, Lesli S.

IR-1999-78 provides that taxpayers have until the end of 1999 to change Roth individual retirement account (IRA) contributions or conversions for 1998 back to traditional IRAs. This is significant for taxpayers who converted, but later discovered they were ineligible.

Taxpayers who filed their returns timely had until Oct. 15, 1999 to make such recharacterizations. The IRS is extending this deadline to Dec. 31, 1999; the additional time gives taxpayers a chance to avoid adverse consequences (e.g., paying both regular and early-distribution taxes on the amounts involved).

The IRS is sending letters to about 20,000 taxpayers who appear to be ineligible for the Roth IRA conversions...