The IRS's new IRA fix costs $3,500. Heirs never had one before.

From May 2027 the IRS fixes four IRA mistakes for $3,500. Heirs who cashed an inherited IRA on bad advice get a way back, if the refund clock hasn't run out.

The Editors · Money · 9 min read · Oct 29, 2026

The Internal Revenue Service Building on Constitution Avenue in Washington, seen from the street under a grey sky — Photo: Shashi Bellamkonda(opens in a new tab), CC BY 2.0(opens in a new tab), via Wikimedia Commons

By the numbers

$3,500IRS fee for one IRA owner's correction request filed before 2028

May 1, 2027the date the IRA Voluntary Correction Program opens

4kinds of IRA mistake the program will fix, three of them only when a provider erred

$50,000the most a custodian pays to fix one error across any number of accounts

The IRS will start fixing broken IRAs on May 1, 2027, through a new IRA Voluntary Correction Program set out in Revenue Procedure 2026-33, released October 22, 2026. An IRA owner pays $3,500 a request. The program takes four kinds of mistake: a missed required minimum distribution, an account opened as the wrong type, an inherited IRA that a beneficiary cashed out on bad advice, and a rollover that missed its 60-day deadline.

The early coverage, such as 24/7 Wall St on October 28, led with the 60-day rollover. That part changes the least. The 2026 fee for a private letter ruling on a missed rollover is already $3,500 (Rev. Proc. 2026-4, Appendix A, December 29, 2025), so the price stays where it was and only the paperwork moves.

The real change is for heirs. Until now, a non-spouse beneficiary who took an inherited IRA out as a check had no way to put it back. From May 2027 there is one, as long as an adviser or custodian caused the mistake and the heir can prove it.

What the program fixes, and who can file

The procedure names four "eligible inadvertent failures" and nothing else (Rev. Proc. 2026-33, section 2 and Appendix A):

Failure	What went wrong	Provider error required?
RMD failure	A provider paid out less than the required minimum distribution	Yes
IRA establishment failure	You asked for one type of IRA and got another, or a non-IRA account	Yes
Non-spouse beneficiary failure	An heir was told a distribution could be rolled over, and it couldn't	Yes
60-day rollover failure	A rollover missed the 60-day window for reasons beyond your control	No

"Provider" is wide. The procedure counts an IRA custodian, a certified financial planner, a fiduciary adviser, a CPA or a licensed attorney, as long as there's a service contract in place. For the RMD and wrong-account failures, the provider also has to have had working procedures that it normally followed, with this case slipping through.

Two more conditions apply to everyone. Your Form 1040 can't be under examination. And you must be current on all your tax returns.

Self-correction isn't offered. Every fix goes through a filing on Pay.gov, with Form 15443 and the fee, and ends in a compliance statement the IRS signs.

The inherited IRA fix is the new part

The tax code bars rollovers by any beneficiary other than a spouse. Once money leaves an inherited IRA, it stays out. The IRS has ruled that "there is no permitted method of transferring them back into an IRA," and turned down requests to reverse it, as Ed Slott documented in InvestmentNews (August 3, 2021). A wrong check to a son, a daughter or a trust meant the whole balance was taxed that year and the tax shelter was gone.

Rev. Proc. 2026-33 opens a door. The heir puts the money into a new inherited IRA in their own name, capped at the original amount plus earnings, minus any RMDs that would have come due. The IRS then treats the whole thing as a direct transfer made on the original date, so the distribution stops being taxable.

The proof is on you. The application must name "the specific errors made or advice provided" by the provider. Written communications carry the weight. Notes you wrote up from a phone call "can be submitted as corroborating evidence but may be given less weight" (Rev. Proc. 2026-33, Appendix A, section 2.03).

So if you're an heir who cashed out after a custodian or planner said you could roll it back, start with the paper. Find the emails, the forms and the letters. Save them now.

The refund deadline lands before the program opens

The fix and the refund run on separate clocks. The program doesn't process refunds: you file an amended return to get the tax back. And a submission "does not extend the statute of limitations on refunds" (Rev. Proc. 2026-33, section 4.01(2)). Ed Zollars, a CPA, flagged the same risk in his analysis of the procedure on October 22.

A refund claim is generally due within three years of filing the return or two years of paying the tax, whichever ends later. Here's what that means in dates (our reading of section 6511, for a return filed on time):

A 2023 distribution reported on a return filed April 15, 2024: the refund window closes April 15, 2027. That's about two weeks before the program accepts its first filing.
A 2024 distribution, return filed April 15, 2025: open until April 15, 2028, which leaves about a year once the program opens.

The procedure names the way out: a protective claim for refund, filed before the window shuts and perfected once the compliance statement arrives. If your mistake is from 2023, that claim is the step to take before April 15, 2027. Even a lost refund doesn't end the case. An heir past the deadline can still rebuild the inherited IRA and get basis credit for the amount put back.

When $3,500 is worth paying

The fee is flat, so the size of the mistake decides. Our break-even arithmetic, using federal tax only:

A missed rollover by someone under 59½ costs ordinary income tax plus the 10% additional tax. In the 22% bracket that's 32 cents on the dollar, so the fee pays for itself above about $10,900.
An inherited IRA cashed out by mistake costs income tax only, since the 10% doesn't apply to death distributions. In the 22% bracket the break-even is about $15,900. A large balance pushed into one year usually lands in a higher bracket, which lowers that figure.

Two failures on the list already have free routes, and they come first.

The 60-day rollover. An automatic waiver applies when a financial institution got the money in time and botched the deposit. And under Rev. Proc. 2020-46 you can self-certify by letter to the receiving institution, at no cost, for listed reasons such as a serious illness or a check that was misplaced and never cashed. Rev. Proc. 2026-33 keeps both. Self-certification isn't an IRS ruling, though, and an auditor can still reject it. The $3,500 buys a signed answer.

The missed RMD. The excise tax is 25%, or 10% if corrected within two years, and you can ask for a waiver free on Form 5329 with a letter showing reasonable error. Pay $3,500 for the same relief only if the free route fails.

Custodians pay far less per account

A custodian that made the same error across many accounts can file one group submission. It costs $10,000 for the first 10 owners and $250 for each owner after that, capped at $50,000 (Rev. Proc. 2026-33, section 7). The cap kicks in at 170 owners. At 1,000 affected accounts, that's $50 per owner, against $3,500 for one person filing alone (our arithmetic).

Group submissions don't cover missed rollovers: for that failure, only the IRA owner can apply. For the other three, if the mistake was the custodian's, ask whether it will file for you. A custodian has to give each owner at least 45 days' notice before including them, and owners consent to being in the group.

Failures in a SEP or SIMPLE IRA plan at the employer level stay out of this program. They go through the employer program, EPCRS, updated the same day in Rev. Proc. 2026-34. The SEP IRA or SIMPLE IRA account you own is eligible, which matters if you run one of the plans compared in our Solo 401(k) vs SEP IRA guide.

What to watch before May 2027

January 20, 2027: the comment deadline. Treasury asks which other failures the program should cover, under docket IRS-2026-1387 on regulations.gov (Rev. Proc. 2026-33, section 11). Our read: excess contributions with no provider error, and self-correction, are the gaps to watch.
April 15, 2027: the last day to protect a refund on a 2023 mistake.
May 1, 2027: filings open. Through 2027, a missed rollover can go to either the new program or a private letter ruling. From 2028 the IRS expects to accept it only through the program, with the fee set each year.

One more thing to know: the IRS's own rollover FAQ still quotes a $10,000 ruling fee (IRS), while the 2026 fee schedule says $3,500. The schedule is the binding one.