Brenda Wren

I recently worked with an attorney who had submitted this problem to IRS via CAP. The method suggested by the attorney and approved by the IRS was to request the excess 415 from the terminated participant and if not received, report on Form 1099 as a taxable event for the affected year(s). Needless to say, the participants did not return the money. Now we have to report a corrected 1099 for the year in which the excess was distributed (difficult to locate 1996 tax forms!). It's also going to be a mess for the participant because unless he can convince his IRA custodian (he rolled his excess) to distribute the excess and delete the tax reporting, he will be taxed on the same money twice!