Money in a traditional IRA is pre-tax; money in a Roth IRA is after-tax. This means that when you move money from a traditional IRA to a Roth IRA, you must include the money in your income in order to make it "post-tax".
When taxes are withheld on a form like 1099-R, this does not mean that your taxes on this transaction were paid.
Instead, this withholding is set aside in your account at the IRS to be applied to whatever taxes you are determined to owe at the end of the tax return creation process. It can happen that too much was withheld in which case you get a refund, or it can happen that not enough was withheld, which means that at the end of the return process, you owe more tax.
Form 8606 is required to be generated and attached to your return whenever you do a number of transactions involving traditional IRAs and Roth IRAs, including your transaction. The reason that it is required is that if you had any "basis" (nondeductible contributions in a traditional IRA) in your traditional IRA, then it would not have been added to your income when you made this transfer to the Roth IRA.
Many (most?) taxpayers do not have nondeductible contributions in their traditional IRAs, so the whole amount of the transfer is usually taxable.
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