@jay1994 You are the first person, that I know of, to report this situation (using 529 money for a prepaid plan), in this forum. I think you should contact the IRS office that sent the CP2057 and explain the situation. Transfers ("rollovers") to another 529 plan are allowed. But, IRS Publication 970 does not specifically describe a transfer to a college prepaid plan as allowed. It's pretty clear that paying future expenses (beyond the 1st term of the next year) is not allowed.
Please post back what you find out, for others reading this.
