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Ok - plan ADP failed in 2007. Refund was done correctly prior to 03/15/2008. Participant reported refund on 2007 individual return as was policy then. January of 2009 a 1099-R was not completed for the refund as it should have been (with a code "P" for taxable in 2007).

Should a 1099-R be done this coming January (2010) and the code "D" (refund taxable in 2007) be completed so that the actual records coincide with the participant's '07 return and the plan records? Does this raise any flags?

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