Richard B. Crow - Page 9




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          expiration of the 60-day period, the trustee corrected its                  
          records to reflect that all of the distribution had been                    
          transferred to the taxpayer’s IRA rollover account.  The parties            
          stipulated that the taxpayer’s IRA rollover account was                     
          established and satisfied the requirements of the Internal                  
          Revenue Code.  The taxpayer did not become aware of the error               
          until after the Commissioner questioned his failure to report the           
          lump-sum distribution on his tax return.  We held that the                  
          financial institution’s bookkeeping error did not preclude                  
          rollover treatment because, in substance, the taxpayer had                  
          satisfied the statutory requirements.                                       
               In Schoof v. Commissioner, supra at 11, we held that the               
          failure of a fundamental element of the statutory requirements              
          for an IRA rollover contribution, namely, the qualification of an           
          IRA trustee, required distributions from an IRA to be includable            
          in the taxpayers’ gross income.  We relied on the following                 
          passage to support our holding:                                             
                    “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 be fulfilled by substantial                         
               compliance.”  [Schoof v. Commissioner, supra at 11                     
               (quoting Rodoni v. Commissioner, 105 T.C. 29, 38-39                    
               (1955)); citations omitted.]                                           









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