The issue is, why did the trustee deem only $25,000 was taxable? From what you told me, it sounds like $75,000 should have been taxable unless there were non-deductible contributions made to the IRA plan. The error is though is that if this was from a traditional IRA that was funded with pre-tax dollars, the entire distribution is taxable and taxes withheld should have based off of a $75,000 distribution.
Contact the trustee and asked why they only declared $25,000 taxable and withheld taxes from that amount.
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