Brian

Just my thoughts: You need to write a check to the rollover entity so that it matches the whole amount that should of been transferred as a pre-tax contribution - to make your client "whole". No tax document should be issued for amount your company writes. Sorry, but this is a cost of doing business. You also need to work with the client by voluntarily reviewing his tax returns and to see the true cost this incident had on him. 20% likely won't cover his additional tax and penalty due at the fed level, and you should also review his state tax filing as there is likely an amount costing him there too with the penalty and taxable income increase. This will be much cheaper to fix it this way than going the attorney route, which you've admitted is your error and will end up costing you anyway. Do you best to correct it! You may even want to compensate him for the hassle too.

Hello, Any advice for the following situation? Our entity is a pension distribution group, we had a member with an IRS levy that we just recently learned had passed away (late reported death). Long story short - we paid the IRS for 8 months of levy payments that shouldn't have happened! About 10k was overpaid. Any shot of getting this back from the IRS? Crying in my great Carlsburg Octoberfest Beer.....thanks Brian!

There doesn't appear any type of fraud was committed. Again, with direct deposit there isn't an incentive for a survivor to contact us if the funds were going into a joint account. A paper check would be much different, then I'm sure we'd receive contact right away. It was a joint survivor annuity with 100% continuance.

Can you please let us know how you handle late reported deaths concerning 1099-R tax reporting? Example: Annuitant dies in 2013, benefits are paid by direct deposit, spousal beneficiary never reports the death to the pension group until 2017. (SSA master file did not have death) All the time the pension group was reporting the income for 2013 through 2016 under the deceased person. Would you issue corrected 1099's all the way back to the member's death year, and then issue new 1099's from that point forward under the survivor's tin for each specific year? Or, report the whole amount received from the death forward on a current year 1099? (with keeping constructive receipt in mind) Can the tax withholdings from the prior years be "transferred" from the deceased person to the surviving spouse for 1099 purposes? What about 2013 being a closed tax year, or if the death was many years prior? It would be hard to understand how their tax returns would accurate. Unfortunately this happens more frequently than one would think. (an issue with direct deposit being too automated and occasional dishonesty) We haven't been able to find much guidance on how to proceed for the tax reporting. Thank you!