Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

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camich27
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Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by camich27 » Mon Jan 22, 2018 7:19 pm

Interesting article in Forbes by Ashlea Ebeling says Congress has "blessed" backdoor Roth:

https://www.forbes.com/sites/ashleaebel ... a8ec967471

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"Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by bigjoec » Mon Jan 22, 2018 7:28 pm

Apologies if this has been posted already, but I thought it interesting. According to the article, footnotes to the conference committee report for the new tax law described the backdoor Roth as allowed by current law -- putting to rest the question of whether the backdoor Roth violates the two-step doctrine.

https://www.forbes.com/sites/ashleaebel ... 42c69d7471

I haven't read the conference committee report myself, or even looked for the Ed Slott report that appears to be the ultimate source for this article. But I thought it useful to post.

I've been generally allowing some appreciation in my After-Tax contribution before I convert it to the Roth, in order to be in a position that to me seems bulletproof against two-step doctrine arguments (in my opinion, paying some tax on the conversion is sufficiently clearly different from a straight Roth IRA contribution that I couldn't be accused of doing something -- a Roth contribution -- disallowed to me). But sounds like I can simplify that now, and do the conversion prior to investing the new contribution.

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Re: "Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by Gronnie » Mon Jan 22, 2018 7:30 pm

So why don't they just explicitly remove the income restriction?

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Re: Backdoor Roth / step doctrine news

Post by Compound » Mon Jan 22, 2018 7:38 pm

Good news! Thanks for sharing. :sharebeer

(Also, nice find by the article’s author! The report she links to is quite long and she found the information for her article in some footnotes.)

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Re: "Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by abuss368 » Mon Jan 22, 2018 7:43 pm

Gronnie wrote:
Mon Jan 22, 2018 7:30 pm
So why don't they just explicitly remove the income restriction?
I have wondered about that the past few years.
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Re: "Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by sport » Mon Jan 22, 2018 7:46 pm

Gronnie wrote:
Mon Jan 22, 2018 7:30 pm
So why don't they just explicitly remove the income restriction?
It's the government. It doesn't have to make sense.

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Re: "Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by iceport » Mon Jan 22, 2018 7:50 pm

abuss368 wrote:
Mon Jan 22, 2018 7:43 pm
Gronnie wrote:
Mon Jan 22, 2018 7:30 pm
So why don't they just explicitly remove the income restriction?
I have wondered about that the past few years.
It strikes me a little like the coupon model: it allows those that know where to find the coupons and have the patience to use them to benefit, but it otherwise meters the the cost of lowering prices across the board. (Of course, that could be a poor analogy, because I never really understood the whole coupon model...)
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Re: "Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by JBTX » Mon Jan 22, 2018 7:56 pm

Gronnie wrote:
Mon Jan 22, 2018 7:30 pm
So why don't they just explicitly remove the income restriction?
In order to legislate that there would be a cost to the overall budget and deficit, and that would either have to be offset or overrridden. There is probably no explicit budget cost to just allowing what is already happening in terms of backdoor Roths.

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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by triceratop » Mon Jan 22, 2018 7:57 pm

I merged bigjoec's duplicate thread into this one, and also expanded on the title a bit to clarify.
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Re: "Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by The Wizard » Mon Jan 22, 2018 8:09 pm

sport wrote:
Mon Jan 22, 2018 7:46 pm
Gronnie wrote:
Mon Jan 22, 2018 7:30 pm
So why don't they just explicitly remove the income restriction?
It's the government. It doesn't have to make sense.
Main issue with that restriction is that it prevents higher income older folks (>70) from contributing earned income to their Roth IRA.
Maybe that's what Congress wants...
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Re: "Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by FiveK » Mon Jan 22, 2018 8:17 pm

JBTX wrote:
Mon Jan 22, 2018 7:56 pm
Gronnie wrote:
Mon Jan 22, 2018 7:30 pm
So why don't they just explicitly remove the income restriction?
In order to legislate that there would be a cost to the overall budget and deficit, and that would either have to be offset or overrridden. There is probably no explicit budget cost to just allowing what is already happening in terms of backdoor Roths.
There is the pro-rata rule in the status quo, and the tax amount it generates, that would go away if the "front door" restrictions were lifted.

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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by SlowMovingInvestor » Mon Jan 22, 2018 8:20 pm

There are people who could back-door, who don't for some reason. A co-worker of mine mentioned that his financial advisor was opposed to it, although I'm not sure why.

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Re: "Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by SCV_Lawyer » Mon Jan 22, 2018 10:41 pm

Gronnie wrote:
Mon Jan 22, 2018 7:30 pm
So why don't they just explicitly remove the income restriction?
That would actually allow more Roth contributions than are practical today from those (like my DW) that have relatively large pre-tax tIRAs from rollovers from prior jobs. Although permitted, the tax ramifications of a backdoor Roth make it economically useless for her due to our 48% state plus federal marginal tax bracket that would apply to the tIRA conversion.

Edit: I see FiveK made the same point above.

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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by White Coat Investor » Mon Jan 22, 2018 11:49 pm

Taking victory lap........just finished my 18th Backdoor Roth IRA earlier this month. I told you so. :)
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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by FIREchief » Tue Jan 23, 2018 12:38 am

SlowMovingInvestor wrote:
Mon Jan 22, 2018 8:20 pm
There are people who could back-door, who don't for some reason. A co-worker of mine mentioned that his financial advisor was opposed to it, although I'm not sure why.
He is likely paying his FA a percent of AUM. Roth conversions result in less, but more valuable, dollars; which erodes what a FA siphons off.
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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by mayhapbh » Tue Jan 23, 2018 1:18 am

From the article:
“When Congress says what its intent is, that’s it. They absolutely, clearly say it’s okay. You can make a contribution to a nondeductible IRA and convert it to a Roth,” says CPA and IRA expert Ed Slott who publishes the IRA Advisor Newsletter.

. . .

The Congressional blessing came in four footnotes in the Conference committee report: 268, 269, 276 and 277.
This is atrociously bad legal advice. Shamefully, horribly bad. The suggestion that footnotes in a report definitively resolve the question whether Backdoor Roths are OK is insane. Backdoor Roths might be OK, they might not be; I don't know and I'm not taking a position on that here, nor giving any sort of advice about what you should or shouldn't do. But if you think a federal appeals court or the US Supreme Court is going to say, "oh, there are footnotes in a report, I guess that settles it!," you have missed decades of case law concerning statutory interpretation.
This post is not advice of any kind -- legal, financial, etc. -- and you should not rely on it.

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Re: Backdoor Roth / step doctrine news

Post by tfb » Tue Jan 23, 2018 1:38 am

Compound wrote:
Mon Jan 22, 2018 7:38 pm
(Also, nice find by the article’s author! The report she links to is quite long and she found the information for her article in some footnotes.)
She didn't find them herself. Not crediting the source who spotted them was bad form. Natalie Choate wrote about this on Morningstar.com on Jan. 12.

http://news.morningstar.com/articlenet/ ... ?id=843356

Whether you can convert was never in question. The question was only about when. Is it the next day, 30 days, next tax year, ...? The footnotes still didn't say when.
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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by Compound » Tue Jan 23, 2018 8:04 am

Ooh — interesting and sad, assuming that’s where she got the tip.

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Re: "Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by Earl Lemongrab » Tue Jan 23, 2018 3:55 pm

Gronnie wrote:
Mon Jan 22, 2018 7:30 pm
So why don't they just explicitly remove the income restriction?
Because that never was the intention of the change to allow conversions at any income level. It's an unintended consequence. Right now, only someone who has no pretax amounts in a TIRA can do the unfettered backdoor. Everyone else has to pay some taxes now, which WAS the intention of the change.

Changing the Roth contribution rules would take an Act of Congress. So would nailing the backdoor shut. I think if they do anything (and there's no indication that they will) the latter is more likely.
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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by The Wizard » Tue Jan 23, 2018 4:46 pm

mayhapbh wrote:
Tue Jan 23, 2018 1:18 am
From the article:
“When Congress says what its intent is, that’s it. They absolutely, clearly say it’s okay. You can make a contribution to a nondeductible IRA and convert it to a Roth,” says CPA and IRA expert Ed Slott who publishes the IRA Advisor Newsletter.

. . .

The Congressional blessing came in four footnotes in the Conference committee report: 268, 269, 276 and 277.
This is atrociously bad legal advice. Shamefully, horribly bad. The suggestion that footnotes in a report definitively resolve the question whether Backdoor Roths are OK is insane. Backdoor Roths might be OK, they might not be; I don't know and I'm not taking a position on that here, nor giving any sort of advice about what you should or shouldn't do. But if you think a federal appeals court or the US Supreme Court is going to say, "oh, there are footnotes in a report, I guess that settles it!," you have missed decades of case law concerning statutory interpretation.
I see.
Can we assume that your opinion on this has no connection to how you make your living, that you have no vested interest in this issue?
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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by Roothy » Tue Jan 23, 2018 5:00 pm

The Wizard wrote:
Tue Jan 23, 2018 4:46 pm
mayhapbh wrote:
Tue Jan 23, 2018 1:18 am
From the article:
“When Congress says what its intent is, that’s it. They absolutely, clearly say it’s okay. You can make a contribution to a nondeductible IRA and convert it to a Roth,” says CPA and IRA expert Ed Slott who publishes the IRA Advisor Newsletter.

. . .

The Congressional blessing came in four footnotes in the Conference committee report: 268, 269, 276 and 277.
This is atrociously bad legal advice. Shamefully, horribly bad. The suggestion that footnotes in a report definitively resolve the question whether Backdoor Roths are OK is insane. Backdoor Roths might be OK, they might not be; I don't know and I'm not taking a position on that here, nor giving any sort of advice about what you should or shouldn't do. But if you think a federal appeals court or the US Supreme Court is going to say, "oh, there are footnotes in a report, I guess that settles it!," you have missed decades of case law concerning statutory interpretation.
I see.
Can we assume that your opinion on this has no connection to how you make your living, that you have no vested interest in this issue?
I am a lawyer, but I don't make my living as a lawyer, so I have no "vested interest" here. And mayhapb is 100% correct.

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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by The Wizard » Tue Jan 23, 2018 5:04 pm

Roothy wrote:
Tue Jan 23, 2018 5:00 pm
The Wizard wrote:
Tue Jan 23, 2018 4:46 pm

I see.
Can we assume that your opinion on this has no connection to how you make your living, that you have no vested interest in this issue?
I am a lawyer, but I don't make my living as a lawyer, so I have no "vested interest" here. And mayhapb is 100% correct.
All righty.
So are you suggesting that folks should avoid doing backdoor Roth contributions until they are explicitly authorized by the court or Congress?
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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by qwertyjazz » Tue Jan 23, 2018 5:05 pm

Fascinating - congressional comments years later - not those associated with passing of a law - are to be used for its interpretation
Not a lawyer also but ...
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Re: "Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by rob » Tue Jan 23, 2018 5:07 pm

sport wrote:
Mon Jan 22, 2018 7:46 pm
Gronnie wrote:
Mon Jan 22, 2018 7:30 pm
So why don't they just explicitly remove the income restriction?
It's the government. It doesn't have to make sense.
Grrr...... I'm not able to do a backdoor but I don't know why this is not the bleeding obvious solution instead of some complex path... You have people in otherwise identical situations that get different options because of where previous money happened to be placed and what the current employer allows :oops:
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Re: "Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by Earl Lemongrab » Tue Jan 23, 2018 5:18 pm

rob wrote:
Tue Jan 23, 2018 5:07 pm
Grrr...... I'm not able to do a backdoor but I don't know why this is not the bleeding obvious solution instead of some complex path... You have people in otherwise identical situations that get different options because of where previous money happened to be placed and what the current employer allows :oops:
Like I said, they didn't set this up to provide Roth contributions for high-income people. They did it to get taxes on TIRA amounts that they weren't before. Somebody found a loophole. You can't use the loophole. Oh well. There's no "solution" because to the IRS and Congress you being unable to exploit the loophole is not a "problem".
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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by Roothy » Tue Jan 23, 2018 5:24 pm

The Wizard wrote:
Tue Jan 23, 2018 5:04 pm
Roothy wrote:
Tue Jan 23, 2018 5:00 pm
The Wizard wrote:
Tue Jan 23, 2018 4:46 pm

I see.
Can we assume that your opinion on this has no connection to how you make your living, that you have no vested interest in this issue?
I am a lawyer, but I don't make my living as a lawyer, so I have no "vested interest" here. And mayhapb is 100% correct.
All righty.
So are you suggesting that folks should avoid doing backdoor Roth contributions until they are explicitly authorized by the court or Congress?
No. I'm saying, as did mayhapb, that whether or not they violate the two-step rule has literally nothing to do with what some congressmen put into a report. Reports (especially ones written after the law has already passed) are not themselves laws; they are not passed by both houses of Congress and they are not signed by the President. The courts give them no deference at all--most judges wouldn't even look at them.

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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by Spirit Rider » Tue Jan 23, 2018 5:28 pm

Roothy wrote:
Tue Jan 23, 2018 5:00 pm
I am a lawyer, but I don't make my living as a lawyer, so I have no "vested interest" here. And mayhapb is 100% correct.
Really, were you a tax lawyer that has argued at the appellate/SCOTUS level.

If you were you would certainly know that the courts have repeatedly and constantly used congressional intent as the basis for IRC rulings.

You would also know that about a year ago (Argued: February 2, 2017, Decided and Filed: February 16, 2017, obviously not a difficult decision). The U.S. Sixth Circuit Court of Appeals issued a ruling: Summa Holdings, Inc. v. Commissioner of Internal Revenue. In this related case regarding the use of two independent actions to exceed the Roth income contribution limit was both legal and proper. Including this direct reference to the backdoor Roth (emphasis mine).

Congress’s decision in 2005 to allow owners of traditional IRAs, who can make contributions regardless of income, to roll them over into Roth IRAs no matter how many assets the accounts hold or how high the owners’ incomes, see 26 U.S.C. § 408A(d)(3), undercuts this contention. Those rollovers permit high-income taxpayers to avoid the income limits on Roth IRA contributions, just as the DISC permitted Summa Holdings to avoid the contribution limits. The Commissioner cannot fault taxpayers for making the most of the tax-minimizing opportunities Congress created.

This will never get anywhere near a court, because the IRS was clearly spanked in Summa Holdings. The IRS is even more subservient to the congressional intent.

Not to mention that this Backdoor Roth whining goose was cooked a long time age. This is just cremating the remains of the picked over corpse.

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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by Lastrun » Tue Jan 23, 2018 5:42 pm

Everyone needs to be careful in the back and forth.

The correct statement of the issue is substantial authority for the tax return position. IMHO the reports COULD POSSIBLY BE substantial authority. Not saying the are, but just saying that statements of 100% certainty that they are not are, with all due respect, incorrect.

Section 1.6662-4(d)(iii) of the Treasury Regulations provide:

(iii)Types of authority. Except in cases described in paragraph (d)(3)(iv) of this section concerning written determinations, only the following are authority for purposes of determining whether there is substantial authority for the tax treatment of an item: Applicable provisions of the Internal Revenue Code and other statutory provisions; proposed, temporary and final regulations construing such statutes; revenue rulings and revenue procedures; tax treaties and regulations thereunder, and Treasury Department and other official explanations of such treaties; court cases; congressional intent as reflected in committee reports, joint explanatory statements of managers included in conference committee reports, and floor statements made prior to enactment by one of a bill's managers; General Explanations of tax legislation prepared by the Joint Committee on Taxation (the Blue Book); private letter rulings and technical advice memoranda issued after October 31, 1976; actions on decisions and general counsel memoranda issued after March 12, 1981 (as well as general counsel memoranda published in pre-1955 volumes of the Cumulative Bulletin); Internal Revenue Service information or press releases; and notices, announcements and other administrative pronouncements published by the Service in the Internal Revenue Bulletin. Conclusions reached in treatises, legal periodicals, legal opinions or opinions rendered by tax professionals are not authority. The authorities underlying such expressions of opinion where applicable to the facts of a particular case, however, may give rise to substantial authority for the tax treatment of an item. Notwithstanding the preceding list of authorities, an authority does not continue to be an authority to the extent it is overruled or modified, implicitly or explicitly, by a body with the power to overrule or modify the earlier authority. In the case of court decisions, for example, a district court opinion on an issue is not an authority if overruled or reversed by the United States Court of Appeals for such district. However, a Tax Court opinion is not considered to be overruled or modified by a court of appeals to which a taxpayer does not have a right of appeal, unless the Tax Court adopts the holding of the court of appeals. Similarly, a private letter ruling is not authority if revoked or if inconsistent with a subsequent proposed regulation, revenue ruling or other administrative pronouncement published in the Internal Revenue Bulletin.

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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by Lastrun » Tue Jan 23, 2018 5:47 pm

Spirit Rider wrote:
Tue Jan 23, 2018 5:28 pm
The IRS is even more subservient to the congressional intent.
In my 5 years with the National Office, technical attorney's at the Service would be more concerned with statements of Congressional intent than they would be with an adverse Circuit Court opinion. See e.g.'s Actions on Decisions by the IRS, where they state they will or will not follow a court decision.

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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by EddyB » Tue Jan 23, 2018 6:06 pm

Spirit Rider wrote:
Tue Jan 23, 2018 5:28 pm
Roothy wrote:
Tue Jan 23, 2018 5:00 pm
I am a lawyer, but I don't make my living as a lawyer, so I have no "vested interest" here. And mayhapb is 100% correct.
Really, were you a tax lawyer that has argued at the appellate/SCOTUS level.

If you were you would certainly know that the courts have repeatedly and constantly used congressional intent as the basis for IRC rulings.

You would also know that about a year ago (Argued: February 2, 2017, Decided and Filed: February 16, 2017, obviously not a difficult decision). The U.S. Sixth Circuit Court of Appeals issued a ruling: Summa Holdings, Inc. v. Commissioner of Internal Revenue. In this related case regarding the use of two independent actions to exceed the Roth income contribution limit was both legal and proper. Including this direct reference to the backdoor Roth (emphasis mine).

Congress’s decision in 2005 to allow owners of traditional IRAs, who can make contributions regardless of income, to roll them over into Roth IRAs no matter how many assets the accounts hold or how high the owners’ incomes, see 26 U.S.C. § 408A(d)(3), undercuts this contention. Those rollovers permit high-income taxpayers to avoid the income limits on Roth IRA contributions, just as the DISC permitted Summa Holdings to avoid the contribution limits. The Commissioner cannot fault taxpayers for making the most of the tax-minimizing opportunities Congress created.

This will never get anywhere near a court, because the IRS was clearly spanked in Summa Holdings. The IRS is even more subservient to the congressional intent.

Not to mention that this Backdoor Roth whining goose was cooked a long time age. This is just cremating the remains of the picked over corpse.
I'm just as confident as you are that the backdoor Roth is ok and the IRS isn't going to pursue it (absent some change), but I don't think that's a fair response to Roothy, who is (I think) only supporting the claim that subsequent legislative commentary isn't part of the traditional canon of statutory construction, per se (and the Treasury Regs should probably be read with that in mind). That said, statements by a current congress, even if not strictly relevant to the interpretive issue, certainly may be relevant to a court's willingness to continue to permit a standing practice that is not conclusively inconsistent with the applicable text.

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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by Roothy » Tue Jan 23, 2018 7:01 pm

Spirit Rider wrote:
Tue Jan 23, 2018 5:28 pm
Roothy wrote:
Tue Jan 23, 2018 5:00 pm
I am a lawyer, but I don't make my living as a lawyer, so I have no "vested interest" here. And mayhapb is 100% correct.
Really, were you a tax lawyer that has argued at the appellate/SCOTUS level.

If you were you would certainly know that the courts have repeatedly and constantly used congressional intent as the basis for IRC rulings.

You would also know that about a year ago (Argued: February 2, 2017, Decided and Filed: February 16, 2017, obviously not a difficult decision). The U.S. Sixth Circuit Court of Appeals issued a ruling: Summa Holdings, Inc. v. Commissioner of Internal Revenue. In this related case regarding the use of two independent actions to exceed the Roth income contribution limit was both legal and proper. Including this direct reference to the backdoor Roth (emphasis mine).

Congress’s decision in 2005 to allow owners of traditional IRAs, who can make contributions regardless of income, to roll them over into Roth IRAs no matter how many assets the accounts hold or how high the owners’ incomes, see 26 U.S.C. § 408A(d)(3), undercuts this contention. Those rollovers permit high-income taxpayers to avoid the income limits on Roth IRA contributions, just as the DISC permitted Summa Holdings to avoid the contribution limits. The Commissioner cannot fault taxpayers for making the most of the tax-minimizing opportunities Congress created.

This will never get anywhere near a court, because the IRS was clearly spanked in Summa Holdings. The IRS is even more subservient to the congressional intent.

Not to mention that this Backdoor Roth whining goose was cooked a long time age. This is just cremating the remains of the picked over corpse.
I just read it. It is a model opinion on why courts DON'T consider evidence like this. I could pick a million quotes from it, but here is one: "Yes, finite language must account for infinite tax transactions. And yes, we appreciate the challenges Congress faces in this area—an endless supply of tax-reducing ingenuity. See ASA Investerings P’ship v. Comm’r, 201 F.3d 505, 513 (D.C. Cir. 2000). But if there is one title
of the United States Code most deserving of attention to text, it is Title 26. These are not the sparing terms of the Sherman Antitrust Act. This is the highly reticulated Internal Revenue Code, which uses language, lots of language, with nearly mathematic precision. Is there any other title of the United States Code that has devoted more carefully drawn words to reducing its purpose to text?"

My point--and the other lawyer's point--is that whether or not backdoor Roths are acceptable has exactly 0% to do with anything other than what is written in the code. Certainly, it has nothing to do with what is written in the footnote of a Congressional report written long after the provision itself. You sound like a tax lawyer. If so, you know that not even Revenue Rulings issued by the IRS itself are binding on courts. Yes, they'll consider them--and they'll even consider congressional committee reports and the like from BEFORE the law is passed, but those, too, don't trump the text. The Code is it. And giving a client advice that suggests that these footnotes determine the question about the legality of backdoor Roths is utterly wrong. For what it's worth, I think backdoor Roths are probably fine under the Code. But I certainly would never tell a client that the reason they are so is because some Congressperson said so and wrote it down long after the law was passed.
Last edited by Roothy on Tue Jan 23, 2018 7:05 pm, edited 1 time in total.

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Re: "Congress put its stamp of approval on [backdoor Roth]" - Forbes

Post by chw » Tue Jan 23, 2018 7:03 pm

Gronnie wrote:
Mon Jan 22, 2018 7:30 pm
So why don't they just explicitly remove the income restriction?
Because those that already have a Traditional IRA need to do the conversion pro-rata with the "old" funds held in the tIRA.

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Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by qwertyjazz » Tue Jan 23, 2018 9:47 pm

Lastrun wrote:
Tue Jan 23, 2018 5:47 pm
Spirit Rider wrote:
Tue Jan 23, 2018 5:28 pm
The IRS is even more subservient to the congressional intent.
In my 5 years with the National Office, technical attorney's at the Service would be more concerned with statements of Congressional intent than they would be with an adverse Circuit Court opinion. See e.g.'s Actions on Decisions by the IRS, where they state they will or will not follow a court decision.
So not my field - so please excuse my ignorance - but trying to go down rabbit hole of ‘legislative intent’ and learning about it - is legislative intent about the context at time of adoption or does it include what Congress discusss afterwards? I have not seen an explanation of timing in the few articles I have read

Thank you
QJ
G.E. Box "All models are wrong, but some are useful."

mayhapbh
Posts: 18
Joined: Sat Feb 25, 2017 8:47 pm

Re: Backdoor Roth / step-transaction doctrine news: [Congress recognizes process]

Post by mayhapbh » Tue Jan 23, 2018 11:30 pm

The Wizard wrote:
Tue Jan 23, 2018 4:46 pm
Can we assume that your opinion on this has no connection to how you make your living, that you have no vested interest in this issue?
I'm not sure I understand the first part of the question, but aside from my own hypothetical taxes, I have no financial interest in whether backdoor Roths are allowed, whether people do them, or whether people are advised to do them. And, as before, I'm not taking a position on whether backdoor Roths are allowed or advisable. My point is just that footnotes in a committee report are nowhere close to dispositive -- and that the article's suggestion to the contrary is irresponsible and wrong. Obviously, obviously wrong.

Whether a court or the IRS would give the footnotes any weight is outside the scope of my comment.
qwertyjazz wrote:
Tue Jan 23, 2018 5:05 pm
Fascinating - congressional comments years later - not those associated with passing of a law - are to be used for its interpretation
Not a lawyer also but ...
"[T]he views of a subsequent Congress form a hazardous basis for inferring the intent of an earlier one." United States v. Price, 361 U.S. 304, 313 (1960).
Spirit Rider wrote:
Tue Jan 23, 2018 5:28 pm
Roothy wrote:
Tue Jan 23, 2018 5:00 pm
I am a lawyer, but I don't make my living as a lawyer, so I have no "vested interest" here. And mayhapb is 100% correct.
Really, were you a tax lawyer that has argued at the appellate/SCOTUS level.

If you were you would certainly know that the courts have repeatedly and constantly used congressional intent as the basis for IRC rulings.
Sure, but the question is whether footnotes in a Committee Report actually reflect the intent of Congress — as opposed to whichever person slipped the footnotes into the report. As Roothy said, “[r]eports (especially ones written after the law has already passed) are not themselves laws; they are not passed by both houses of Congress and they are not signed by the President."
This post is not advice of any kind -- legal, financial, etc. -- and you should not rely on it.

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