Please talk to a tax person first

[TheOtherMe]

My 77 year old cousin had some money in IRAs. Her bank's rate for CDs was 1% point higher so she pulled all of her money out of the IRAs and put it in to the CDs. She did not realize that since this was not a direct rollover, she owes taxes on the entire amount. It might have helped if she had told her IRA custodian what she was doing.

This was on a previous year's return. She ignored the 1099Rs and now has received notice from the IRS that she owes income tax, penalties and interest.

Advice from my years in the world of tax preparation: Ask a tax person before you do something big like this.