The IRAS source 00016-3056 is identified with a 508-d eclipsing binary situated in the halo, approximately 5 kpc above the Galactic plane. Near-infrared photometry, optical photometry and spectroscopy of the system are discussed. The JHK light curves show two eclipses as well as a pronounced reflection effect exceeding 0.5 mag at J. The primary is an early-M giant, possibly an AGB star, seen in the infrared through AV ∼5.3 mag of extinction. In contrast, the optical light experiences much lower extinction (AV ∼0.8 mag), and can be understood as the result of a reflection of one of the central stars from a circum-binary cloud. The nature of the secondary remains unclear, although various possibilities are discussed. It is suggested that the system may be a unique representative of a short-lived evolutionary phase and that changes due to evolution may be observable over a relatively short time interval.