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I have never seen a brokerage (I expect the institution was not a bank) on a retirement custodial account do any sort of tax w/h and reporting, they'll cut checks to the account holder but that's usually it - don't know what anyone else's experience is, but that should have been a red flag from the start. Not to further alarm, but failing to report income like that is tax evasion, pure and simple, and is the kind of thing for which people go to prison. A lawyer told me long ago, you can play with deductions and if you get caught you get taxes, interest and penalties, but you hide income and get caught you go to prison. So a tax lawyer should be hired to clean this up ASAP unless it no longer matters based on account holder's incapacity. But if son wants to protect for his future benefit and sleep at night, they will want to address. Good luck.

First, there is no mandatory 20% withholding on a RMD, as it is not an "eligible rollover distribution." The participant could then have elected out of 10% withholding. So although there is no excuse for no 1099-R being filed, there may not be any penalties for failing to withhold. Failure to declare it as taxable income is another story. Beyond that, the son needs to take this to tax counsel. Did the institution agree, in writing, that they were responsible for 1099-R reporting? (I doubt that anyone else was responsible, as "solo-k" plans rarely have a TPA. ) But, the financial institution may be relying on maximum deniability, and be very unhelpful. Or maybe they will step up to the plate. Again, he son should go to tax counsel.

Good point Bill, that most do not calculate the RMD either, unless it's an IRA. Thanks! Roll Tide!

Agreed that most do not. But most do not calculate the RMD either unless it's an IRA. And when it's an IRA, most do prepare the 1099-r. So it's a bit of a mixed bag here. The paperwork for the account or the request to prepare the RMDs will specify, I would think.

You are correct. And your company SHOULD be more terrified of the consequences or potential liability for knowingly administering a plan in violation of the document (which almost certainly states the parameters of the exclusion) and in violation of the regulations. Refer your supervisor to 1.403(b)-5(b)(4)(ii), and (iii). And in (iii)(B)(1), have them note the "reasonably expects" clause that you alluded to above. The IRS also provided some additional guidance on this subject in IRS Notice 2018-95. Good luck!

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I think you have a problem with the refinanced amount plus the highest outstanding balance in the last year being greater than $50,000. The highest outstanding balance in the last year was probably on the day before the first repayment was made in 2021, so take $50,000, subtract that amount, and the difference should be the maximum they can add by refinancing. The loan payments do have to be level throughout the term of the loan, so for all remaining 69 months. If the new payment is at least equal to the amount that would be needed to amortize the additional loan amount over 60 months on its own, then you should be fine. For example, it would be a problem if the outstanding balance on the original loan was $1,000, and they wanted to add $40,000 by refinancing. The amount that would amortize $41,000 over 69 months would not be enough to amortize $40,000 over 60 months.

I think that as long as the amount added to the loan will be fully repaid within 60 months, it is ok. The amount outstanding from the original loan as of the refinance date could be repaid as late as 69 months from the refinance date.

The 5500 filings, SPD, and the participant's statements should be all the attorney needs. The math, as BG5150 pointed-out, is simple enough once they have those items. I don't see any circumstance, outside of a subpoena, where a plan sponsor should divulge a full valuation report that contains data for participants that are not part of the QDRO. With that being said, I don't know of anything specific in the code that addresses this. Generally speaking there is a fiduciary duty of the plan sponsor to protect participant information. There may also be a privacy policy in place that would be violated if a full valuation is provided. I would start there and if it becomes contentious, follow Belgarath's advice and recommend your client seek ERISA counsel.

Would it be possible to re-register the IRA in the name of the plan, and then begin to track annually as an outside asset? Although this would not solve the 1099R that was issued.