20% FIT Error

[CLE401kGuy]

Distributions are processed manually on balance forward plan.... Participant elects lump sum distribution to herself - It's $1200 - Inadvertently, a check is sent to the participant for the full $1200 with no withholding - therefore $240 in required FIT was not withheld - process the 1099-R in January '14 showing full amount taxable with no taxes withheld and move on or work with the participant to obtain the $240 and make the FIT as soon as practicable...

[Bill Presson]

You can request it from the participant (and should) but you likely will not get it.

[ESOP Guy]

If it were me I would move on. I have never seen anyone who has gotten in trouble for failing to withhold. I suppose there could be a first time. But my impression is the IRS figures if they get the 1099-R they are going to get their money in withholdings or on April 15th.

[BG5150]

If it were me I would move on. I have never seen anyone who has gotten in trouble for failing to withhold. I suppose there could be a first time. But my impression is the IRS figures if they get the 1099-R they are going to get their money in withholdings or on April 15th.

Especially on a $1,200 distribution...