2017 1099-R never filed

Hello,

We are preparing the year end valuation for a small 3 life 401(k) Plan.  For 2017, one participant rolled their account to an IRA (direct rollover).  A 1099-R was never issued.

At this point, how should this be corrected.  Since this was a non-taxable event for the participant, would it be ok to let it go?

Thank you.

46 minutes ago, Albany said:

Hello,

We are preparing the year end valuation for a small 3 life 401(k) Plan.  For 2017, one participant rolled their account to an IRA (direct rollover).  A 1099-R was never issued.

At this point, how should this be corrected.  Since this was a non-taxable event for the participant, would it be ok to let it go?

Thank you.

You correct by issuing the 1099-R. No, its not ok to just let it go.

You file it now and pay whatever penalty the IRS assess or try to get the penalty waived.

The two prior answers are the only correct ones.  Not filling can cause a big problem for the participant. The IRA custodian reports the incoming funds to IRS (as they do every year for every IRA).  Without the corresponding 1099 showing the funds coming out of a qualified plan, the deposit looks like a BIG (and illegal!) annual IRA and could cause all kinds of problems for the participant. The participant NEEDS to have that 1099 filed for his protection if nothing else.

If fewer than 11 1099-Rs were filed for 2017 for the Plan or Sponsor, the IRS will not impose a late filing penalty.

The 1099-R is important for the participant in the future to verify that the IRA was created from a rollover.  Not filing now could bite him later.