What happens if your IRA runs afoul of (or your custodian believes it runs afoul of) your state’s unclaimed property law and the account is forwarded to the state?  Well, technically your funds are no longer held by an IRA custodian—a problem, as that creates a deemed distribution of the funds in the IRA.

This problem appears to be what confronted the taxpayer in PLR 201504021.  The facts indicate that the IRA custodian, without the taxpayer’s knowledge, transferred the taxpayer’s account to “Division M of State N.”  While the exact details are, as required, redacted, it seems reasonable to assume that “Division M” was the state’s unclaimed property department.