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Okay, I recently got confused...which is not too hard for me. It may not matter, but client has an individual, trustee-controlled 401K plan. He initially is funding the plan with a rollover/transfer. The account, while trustee-directed, is maintained at a national financial services company (e.g,. Merrill Lynch). I have always told clients that when they are moving funds into a 401K plan that they MUST report the rollover via thei 1040 tax return for the same year via line 15A/B or 16A/B....the difference between the two line items on the 1040 being whether the rollover funds are coming from an IRA (line 15) or other qualified plan (line 16). Also, the IRS wants one to write rollover in the margin and attach a note of explanation of what they did. In a recent conversation with the financial services company and their department that deals with rollovers, they stated if the funds from custodian 1 are sent to the new 401K plan at company #2 via ACAT, that a 1099 will not be prepared by company #1 and, as such, it is not a rollover but rather a direct transfer. They stated that the key is that it is an ACAT transfer and, if so, company #1 will not prepare a 1099 coded G (for rollover) and the individual does NOT have to report the event on their 1040 tax form. IF this is correct, great. Maybe I have been too conversative, but I have always operated that when funds come into a 401K, the event (rollover? direct transfer?) MUST be reported on the 1040 tax form. If the client doesn't have to, great...but I would feel more comfortable getting feedback from others? Any help out there? Thanks.