Missing 1099R for Roth distributions

[Kea]

Client gave me confirmation receipts of Roth distribution and rollover (trustee to trustee). Neither are taxable (age 60, acct opened 10 years). No 1099R. He called and they said they were not issued to him or IRS since they were not taxable events.

Is the rule of issuing 1099R different for Roth? I know it doesn't affect his tax return, but should he have the 1099s? Should I hold the efile to see if he can talk someone else into issuing the 1099s?

[David1980]

From a Roth IRA to a Roth IRA, trustee to trustee? No 1099-R necessary, nothing needed on the 1040.

Transfers

Generally, do not report a transfer between trustees or

issuers that involves no payment or distribution of funds to

the participant, including a trustee-to-trustee transfer from

one IRA to another IRA, valid transfers from one section

403(B ) plan in accordance with paragraphs 1 through 3 of

Regulations section 1.403(B )-10(B ), or for the purchase of

permissive service credit under section 403(B (13) or

section 457(e)(17) in accordance with paragraph 4 of

Regulations section 1.403(B -10(B ) and Regulations

section 1.457-10(B )(8). However, you must report:

Recharacterized IRA contributions;

Roth IRA conversions;

Direct rollovers from qualified plans, section 403(B )

plans or governmental section 457(B ) plans, including any

direct rollovers from such plans that are IRRs or are

qualified rollover contributions described in section

408A(e); and

Direct payments from IRAs to accepting employer

plans.

[Jack from Ohio]

So say the regs, but we have received CP2000 for Box 7 Code "G" 1099Rs that were not included on the return. The notice even indicated that it was distribution code "G".

Sounds good in theory, but in real life, if you don't put it on the tax return, you will get the CP2000.

Investment companies are just finding more ways to reduce customer service by doing less.

[Kea]

But they didn't send either 1099R to IRS, either (or so they told my client). I would be happy to put in a "dummy" 1099R but not sure what effect that would have if they didn't send it to IRS.

I do have a 1099R from them from 2012 when a rollover was done. It was not trustee to trustee so they issued it. Client learned advantage of trustee to trustee and did it that was for 2013.

[David1980]

So say the regs, but we have received CP2000 for Box 7 Code "G" 1099Rs that were not included on the return. The notice even indicated that it was distribution code "G".

Sounds good in theory, but in real life, if you don't put it on the tax return, you will get the CP2000.

Investment companies are just finding more ways to reduce customer service by doing less.

Different scenario there. In that scenario there is a 1099-R code G received by the taxpayer. In this one, there is no 1099-R at all. There is no rollover so a code G does not apply. If this was a direct rollover from say a 401K to an IRA you would have a 1099-R box 7 code G. Because it is a trustee-to-trustee transfer from a Roth IRA to a Roth IRA a 1099-R isn't required. Transfer vs. Rollover. Not the same thing.

In the rollover scenario I agree that if a 1099-R is issued you need to include something on the return even though it's a rollover.

[Kea]

Thanks. I won't worry about the trustee to trustee move.

How about the distribution? Not taxable because he meets the age and 5 year criteria. Should a 1099R be required for that transaction?

Just trying to avoid the nastygrams.

[Jack from Ohio]

Any distribution from a retirement account requires the creation of a 1099R. I know of no exception to this.

[David1980]

Agree with Jack. I'm not aware of any exceptions for issuing a 1099-R for a Roth IRA distribution.

Roth IRAs. For distributions from a Roth IRA, report the

gross distribution in box 1 but generally leave box 2a

blank. Check the “Taxable amount not determined” box in

box 2b. Enter Code J, Q, or T as appropriate in box 7. Do

not use any other codes with Code Q or Code T. You may

enter Code 8 or P with Code J. For the withdrawal of

excess contributions, see Roth IRA, later. It is not

necessary to mark the IRA/SEP/SIMPLE checkbox.

[Kea]

That was what I was thinking, but I didn't know where to find the specific rule. I had just never heard of a distribution without a 1099R.

So, now what? Do I file with a "dummy" 1099R? Not sure if my client can get the company to generate a 1099R at this point.

Or, just keep all documentation and deal with the nastygram if / when IRS sends it?

[David1980]

4852 works as a substitute for a missing 1099-R as well as a missing W-2. Assuming you've got the info I'd go that route.

[Kea]

Fabulous. I never thought about for anything but a W2. I haven't even used for that in at least 10 years.

[kcjenkins]

The 4852 covers you and the client, whether they did or did not file it.