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IRA. The taxpayer properly executed the transaction within the
required 60-day period, but the trustee mistakenly recorded a part
of the proceeds as having been transferred to a non-tax-deferred
account. We therein found that the taxpayer did everything
reasonably expected to comply with the statutory rollover
contribution requirements, including meeting with his IRA trustee,
instructing the trustee to open an IRA, executing the documents to
open the IRA, and transferring the distribution to the trustee for
deposit in the IRA. Moreover, the trustee assured the taxpayer
that the rollover transaction would be carried out. We held in
Wood that the trustee's bookkeeping error did not preclude rollover
treatment because the taxpayer had substantially complied with the
statutory requirements.
The facts herein are distinguishable from those in Wood v.
Commissioner, supra. The present case involves the failure of a
fundamental element of the statutory requirements for an IRA
rollover contribution, namely the qualification of the IRA trustee;
whereas Wood v. Commissioner, supra, involved procedural defects in
the execution of the rollover.
Where the requirements of a statute relate to the
substance or essence of the statute, they must be rigidly
observed. On the other hand, if the requirements are
procedural or directory in that they do not go to the
essence of the thing to be done, but rather are given
with a view to the orderly conduct of business, they may
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