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erroneously credited the transfer of the IRA funds to a non-IRA
account. Id. at 117. The Court held that Merrill Lynch’s
bookkeeping error did not disqualify the taxpayer’s transfer of
his IRA funds as a valid IRA rollover. Id. at 122. The Court
stated that Congress did not intend “to deny rollover benefits to
taxpayers on the basis that a financial institution or other
qualified IRA trustee made a mistake in recording a transaction.”
Id. at 122.
We believe that the case of Wood is factually
distinguishable from the instant case. Whereas the taxpayer in
Wood established a valid IRA, Mr. Anderson never established, nor
instructed the bank officer to establish, a valid IRA (or trust)
account with Arlington in which the transferred IRA funds could
have been deposited. Additionally, unlike Wood, which involved
“procedural defects in the execution of the rollover”, the case
here, as was true in Schoof v. Commissioner, supra at 11,
“involves the failure of a fundamental element of the statutory
requirements for an IRA rollover contribution”. Mr. Anderson’s
failure is that he never created an IRA trust in which the
transferred funds could be placed.
Lastly, unlike the taxpayer in Wood, petitioners did not
exercise the necessary due diligence in creating an IRA account.
We note in this regard that Mr. Anderson is a business-minded,
college-educated man who we believe (on the basis of our
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