I have a client that at one time tried this trick a couple times within a year. I do not recommend it, this is a cautionary tale.
The client borrowed money from their traditional IRA. Normal withdrawal with no exceptions, if not rolled over into a new account within 60 days it would be taxed with the penalty. You can almost guess what happened.
So, they have the cash in hand and use it for their business planning to roll it over into a new account within the 60-day period.
It worked and they rolled the money back into the existing account, no harm no foul.
Then they did it again later in the year. Again, they put the money back in within 60 days.
At the end of the year, they received a 1099 for the money and the penalty. The company had a policy in place that allowed the practice to be done once, twice triggered the penalty and taxable event. But they made their IRA contribution that year…
Don’t play games that will involve the IRS, you never want the IRS to think you are trying to play the system. They may start looking more closely at you, and no one wants that. Even with so few employees that are always looking for the tricksters.