Refusing to cash RMD checks because afraid of govt

Intent is to avoid politics here. The situation goes back to 2018.

Missing participant who was not cashing RMD checks has been found and turns out was never missing, just doesn't want to cash a check for fear of being located by the government. Unknown whether participant is legal or illegal but there is an SSNO (Sorry I don't know details about all that). Yes 1099-R's are sent annually.

Just trying to be creative here on how to get them their money. One idea - has anyone ever managed to get cash from a Plan to give out the RMD rather than in check form?

Total account balance is < $20,000.  Total outstanding uncashed RMD's < $1,000.

Does the plan provide for forceouts after NRA?  That could eliminate future problems for the sponsor, at least.
 

(Still hoping someone suggests a sack of nickels with a big $ on the front, left on the guy's doorstep every December.)

57 minutes ago, TPApril said:

Just trying to be creative here on how to get them their money.

In what way has the Plan failed to "get them their money"?  From your post, it appears the RMD has been paid and the 1099-R has been provided, but the participant has failed to cash the checks.  Is it the responsibility of the Plan or trustee to force a participant to cash the check?

Perhaps a gentle reminder that the cashing of a check is not what alerts "the government", but it's the filing of the 1099 form, and he/she has taxable income?

34 minutes ago, david rigby said:

Perhaps a gentle reminder that the cashing of a check is not what alerts "the government", but it's the filing of the 1099 form, and he/she has taxable income?

I'd also add that it was taxable when available to them; they can't escape that by not cashing the check (constructive receipt) 

1 hour ago, david rigby said:

In what way has the Plan failed to "get them their money"?  From your post, it appears the RMD has been paid and the 1099-R has been provided, but the participant has failed to cash the checks.  Is it the responsibility of the Plan or trustee to force a participant to cash the check?

Perhaps a gentle reminder that the cashing of a check is not what alerts "the government", but it's the filing of the 1099 form, and he/she has taxable income?

The recordkeeper has put the money back into the plan in an Unallocated Account that we are now reconciling in addition to the plan's regular accounts. Preference is to get the participant out of the plan entirely.

2 hours ago, Bri said:

sack of nickels

Pennies! If you can find enough of them.

Some states have an unclaimed property fund.  Could you escheat the funds for the unclaimed checks to that?  Not the best option but it is a possibility.

1 hour ago, Alan Simpson said:

Some states have an unclaimed property fund.  Could you escheat the funds for the unclaimed checks to that?  Not the best option but it is a possibility.

Before doing that (he said, not knowing if such action is legit), one might try a gentler approach.  One might "suggest" to the participant that escheat might happen, thus making it even more difficult for him/her to get the money.  Such communication might be more effective if the PA enlists the assistance of some other party (sibling perhaps?) that is more effective in getting the point across.  Such communication will likely emphasize the above facts: (1) each payment has already been reported to the IRS, and (2) each payment is already taxable income (along with the corollary fact that the IRS "frowns upon" the avoidance of paying taxes and the avoidance of filing or declaring taxable income).