Refusal to reissue distribution check

[dmwe]

I'm trying to assist an alternate payee on a QDRO who had distribution check made out to her current employer plan and now needs the money and wants the check reissued to her. She wants to avoid the 10% penalty and can't roll it in and out of her employer retirement plan without incurring the penalty. Fidelity refuses to reissue her check stating that the distribution has already been reported to the IRS. I think that's a bunch of BS. Fidelity hasn't issued 1099Rs yet so participants should have the ability to change their mind on a distribution, don't you think?

I'm trying to lodge a complaint with the IRS but don't have any good contacts there or phone numbers and have been sitting on hold for 20 minutes.

Any suggestions?

[ETA Consulting LLC]

Unfortunately not. Typically, foregoing the exemption on the 10% penalty is something that is vetted prior to requesting a distribution from the plan. Once a bonafide distribution request is made and a distribution is paid out pursuant to that request, there wouldn't appear to be any allowable exceptions to what Fidelty is saying. Now, it would be much different had Fidelty issued a distribution contrary to what was requested.

Good Luck!

[ESOP Guy]

All due respect Fidelity did follow her direction on a valid form and you seem to be admitting as much.

I can't see the IRS helping her. It isn't an issue that they should be involved in.

Have you tried talking to the plan sponsor of the plan in question?

My guess this is where you will get the most friendly ear to listen to the idea that you would like to have the check reissued differently.

My guess is if the plan sponsors tells Fidelity they would like to have the check reissued Fidelity would listen that the plan sponsor is the customer.

[dmwe]

Thanks all for your advice.