beckster2010 Posted February 14, 2023 Report Share Posted February 14, 2023 Hello fellow Preparers! Here's a good one. Last year, client directly rolled over an entire IRA from Wells Fargo to another financial institution. The entire amount was rolled over successfully into an IRA. Client never received a 1099-R from Wells Fargo showing gross distribution and distribution code G. Client calls Wells Fargo IRA department and after a conversation including a supervisor they are told that since they never touched the distribution then they do not receive a 1099-R. What the heck!? Further, if they feel that they need a 1099-R, then they are given an address to Wells Fargo IRA department in North Carolina to send a letter stating why. Really??? Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted February 14, 2023 Report Share Posted February 14, 2023 Meh. No 1099R, no IRS matching notices. I would never have called. 1 Quote Link to comment Share on other sites More sharing options...
Max W Posted February 14, 2023 Report Share Posted February 14, 2023 Usually, in every case of a client rollover, a 1099-R is issued as a taxable Distribution. Then the client has to show that the rollover occured on a timely basis. This client should keep the relevant bank/brokerage statements to substantiate the timely rollover - just in case..... 1 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 14, 2023 Report Share Posted February 14, 2023 IRS Pub. 4012 https://apps.irs.gov/app/vita/content/globalmedia/1099r_exclusion_worksheet_4012.pdf A taxpayer should not receive a Form 1099-R for a trustee-to-trustee transfer from one IRA to another, but should receive a Form 1099-R for a trustee-to-trustee direct rollover from an employer qualified plan to an IRA with code G. 6 1 Quote Link to comment Share on other sites More sharing options...
BLACK BART Posted February 15, 2023 Report Share Posted February 15, 2023 Had a similar case some years back and felt the same way as Beckster (all IRAs need a 1099). Called the sending bank and asked ("Where's my 1099?"). That bankster ended up schooling this tax pro - his reply: "It's direct to another bank - we don't have to send him one." So, after advising him that he was mistaken, I looked it up and found advice as per Lion's above. Quite embarrassing! But those moneychangers aren't always right. That same bank prez later told one of my clients "It's too bad you built it yourself. Self-constructed houses don't qualify for the $8,000 new home credit." I looked it up: they WERE (and I got it for him). Never got around to calling bank and saying touche, darnit. Moral for clients re advice: Avoid bankers and stick to the hairdressers (their bologna is less costly). 1 3 Quote Link to comment Share on other sites More sharing options...
Jim Oh Bkkr Posted February 15, 2023 Report Share Posted February 15, 2023 8 hours ago, BLACK BART said: "It's direct to another bank - we don't have to send him one." "We CAN, but we don't have to." So we preparers are left to deal with the aftermath. No client wants to get a "nastygram" 2-3 years down the road, so we have to verify if they "did" or "didn't". 3 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted February 15, 2023 Report Share Posted February 15, 2023 23 hours ago, Lion EA said: IRS Pub. 4012 https://apps.irs.gov/app/vita/content/globalmedia/1099r_exclusion_worksheet_4012.pdf A taxpayer should not receive a Form 1099-R for a trustee-to-trustee transfer from one IRA to another, but should receive a Form 1099-R for a trustee-to-trustee direct rollover from an employer qualified plan to an IRA with code G. So , Wells Fargo is correct and the IRS will not be expecting a 1099R. Good. One less form for them to deal with. 2 Quote Link to comment Share on other sites More sharing options...
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