Help with 945-X "Administrative Error"

[Sleuth]

In mid December 2019 I instructed my investment firm to transfer funds from my traditional IRA to establish a new Roth IRA and NOT to withhold taxes.

I realized the 1st week of February that they had withheld 10%  and issued a 1099-R reflecting it.  I requested a refund of the withholding at that time.

They are now telling me they cannot refund the withholding because of the 945-X definition of "Administrative Error".  I would like the funds returned back into either IRA account. 

 

Is this possible or is this 400+ billion firm not being truthful?

[Bird]

I'll say I'm not sure but it's got to be a difficult fix.  It's not like the firm has the money; they already sent it to the IRS.  And they reconciled their withholding on Form 945.  And they issued a 1099-R telling the IRS that it's your money.  And it's now March of the next year.  It's not like they can get the money back from the IRS, at least not easily...I think it's going to be easier/faster to take other money and deposit it, and call it a rollover, and deal with the inevitable IRS inquiry later explaining the circumstances for the late rollover.  I assume you have a copy of the form or other documentation saying you didn't want withholding?  

"On the other hand"...it doesn't seem right that they can screw up and then just shrug their shoulders and make it your problem.

It's not much of an answer but I figured I'd try to continue the conversation.