Here are two examples of taxpayer benefits.
Example 1: A SIMPLE IRA owner has been contributing for eight months. Without knowing the rules, he transferred his SIMPLE IRA assets to his Traditional IRA at another administrator to consolidate his investments. He was told later by his CPA that this was a violation of the rules. To correct the error, the taxpayer may recharacterize the Traditional IRA assets back to the SIMPLE IRA – as if the transaction never transpired. The administrator, at the end of the year, will report the transactions to the IRS and the IRA holder, showing the movement of the assets.
Example 2: A Roth IRA holder makes a contribution and later finds out that he was not eligible to make a Roth IRA contribution because he exceeds the Modified Adjusted Gross Income limits to contribute to the Roth IRA.   He may recharacterize his Roth IRA contribution to the Traditional IRA since there is no income limit when determining eligibility for Traditional IRA contributions.