In the past, the IRS limited you to one IRA rollover per year per account. But, thanks to the Tax Court’s recent ruling in Bobrow vs. Commissioner, that will be changing.
Indeed, as of next year, you will be allowed just one IRA rollover per year. Period. This change was made made public in Announcement 2014-15, though it won’t actually go into effect until next year.
For background, a rollover is said to occur when you take a distribution from an IRA and re-deposit the proceeds into a qualifying account within 60 days. If you fail to re-deposit within that timeframe, you’ll be liable for taxes and/or penalties.
Note that a rollover is thus distinct from direct trustee-to-trustee transfers, in which case the money is passed directly from one custodian to another. These sorts of transactions, in which you (the account owner) never touch the money, do not count toward the once-per-year limit.
The once-per-year limitation on IRA rollovers exists to prevent people from stringing together a series of multiple rollovers, effectively giving them ongoing access to funds that should be locked up in an IRA. The proposed change will strengthen this rule, though it will also make things more complex for IRA custodians.
For their part, the IRS says that it will “revise Publication 590 to the extent needed” to follow the Tax Court’s interpretations. However, they “will not apply the Bobrow interpretation […] to any rollover that involves and IRA distribution occurring before January 1, 2015.” So if you’ve run afoul of the new rule this year, it’s all good.