Guest ircreader Posted March 12, 2002 Posted March 12, 2002 We mailed a 402(f) notice to a participant with less than a $5,000 balance. A month after that, we sent a check to the address of record. Turns out she had moved. She found the check at her parent's house. Unfortunately, she was advised to return the check to us with rollover instructions. She did this on the 60th day after the check was cut. She was told by a CPA during the 60 days to roll the check to an IRA and make up the 20% withholding with her own money, but, she chose to return the check instead. Now she wants us to roll the 80% to an IRA. What can we do?
Guest b2kates Posted March 12, 2002 Posted March 12, 2002 If the plan considers the return of the check as a nonevent, i.e. that no distribution occurred. Then the plan should be able to obtain the withholding back from the IRS and distribute to P 100%. Couple of practical problems: How often does the plan make withholding deposits? The best way to handle this is to net the next deposit. If there are no future deposits will have to request a refund on form 945. My group processed these requests for the bank. If you want further assistance feel free to drop me a note.
mbozek Posted March 12, 2002 Posted March 12, 2002 was a 1099 issued for 2001 or is this a 2002 distribution? If it is a 2002 distribution then there should be no problem in issuing a new check for the distribution. mjb
Guest ircreader Posted March 13, 2002 Posted March 13, 2002 Thanks to all who have responded. Yes, a 1099 was issued for the 2001 distribution.
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