Time limit on recovering erroneous FIT withholding.

[RCK]

Our (institutional) trustee is telling us that the deadline for recovering erroneous FIT withholding for calendar year 2001 distributions was 1/18/02. Can anyone tell me whether this is an IRS deadline, or just something that the trustee is doing for their convenience?

Longer story: we made a mistake in making a death benefit distribution from a 401(k) to the beneficiary. Instead of distributing to him, we cut the check to the deceased and took the 20% withholding in the deceased's ssn. The check was cashed and we are pursuing the net amount as a forgery case. But that leaves the 20% that was submitted to the IRS in the deceased's ssn. How do we recover that portion?

I'm out of my element here--any ideas anyone?

RCK

[BPickerCPA]

The trustee is merely a conduit. Once they transmit the money to the IRS, they no longer are in control of it, and therefore cannot refund it.

[Guest b2kates]

BPickerCpa, Iwas the tax manager for a bank that is the payor for approximately 1 million retirees. We consistently pursued refunds from the IRS and made corrections to the participant. We did however have a January cut off for such refunds.