1099 R Question

[Pammie57]

We have a client who terminated their  401k qualified retirement plan in 2014.  However, they did not pay out funds until January 2015.  Their funds were with a brokerage account.  Unfortunately the 1099R's were never done for all 9 participants.  This was strictly an oversight since the TPA at the time and the brokerage house thought someone was preparing those (along with the 1096 and form 945) 

Is there any way to get penalties for non-filing abated?  Has anyone every had this happen in their practice?  How did you resolve?  I assume we need to do the late 1099rs, etc and send those out asap.

This means that all affected may have to file amended 1040's.

This is a mess.

Thanks for any comments/helpful suggestions on how to fix this asap

 

[Mike Preston]

I have very little sympathy for those that claim they need to amend their returns.  They got their money and should have been clamoring for their 1099's.  Of course, no change to their taxes if their funds were rolled to IRA's.

[Lou S.]

 

Yes the 1099-Rs and other forms are required to be filed.

You can file a request for waiver of penalties. I have no idea how successful that will be. I have never tried.

Yes, if folks have taxable income they didn't claim they will have to file amended returns for 2015 and penalties and interest will likely apply.

I'm only a little more sympathetic than Mike. I'm sure some of the folk "forgot" they got taxable retirement plan distributions and just assumed they received all the tax forms they were supposed to. Though there may be some who just thought they were getting away with unreported income, for those I have no sympathy.

And if rollovers were done, it's really just a reporting issue. Taxable distribution on the other hand.