In both Proposed Regulation § 1.408-4(b)(4)(ii) and IRS Publication 590,Individual Retirement Arrangements (IRAs) rollover, the IRS says the limitation is applied on an IRA-by-IRA basis. However, a recent Tax Court opinion, Bobrow v. Commissioner , T.C. Memo. 2014-21, held that the limitation applies on an aggregate basis, meaning that an individual could not make an IRA-to-IRA rollover if he or she had made such a rollover involving any of the individual’s IRAs in the preceding 1-year period. The IRS anticipates that it will follow the interpretation of § 408(d)(3)(B) in Bobrow and, accordingly, intends to withdraw the proposed regulation and revise Publication 590 to the extent needed to follow that interpretation. These actions by the IRS will not affect the ability of an IRA owner to transfer funds from one IRA trustee directly to another, because such a transfer is not a rollover and, therefore, is not subject to the one- rollover-per-year limitation of § 408(d)(3)(B). See Rev. Rul. 78-406, 1978-2 C.B. 157.
An IRA rollover is to withdraw funds from an IRA and redepositing the funds within 60 days.
Announcement 2014-15 won't be effective for the rest of us until 2015:
From now on, clients had better be making trustee-to-trustee transfers.
The case in question is at: http://www.ustaxcourt.gov/InOpHistoric/BobrowMemo.Nega.TCM.WPD.pdf