It is common for institutions to fail to send a taxpayer a 1099-R for trustee-to-trustee transfers, on the theory that there is no tax consequence anyway. Unfortunately, your IRS custodian did the worst of all worlds: sent an incorrect 1099-R to the IRS, but failed to send you a copy so that you could see that it was wrong.
There should be some paperwork (or an email) confirming that you asked the IRA custodian for a trustee-to-trustee transfer from the IRA to the 457b. In addition, there is likely some paperwork indicating that the 457b plan administrator received a trustee-to-trustee transfer from an IRA on or about the same date.
When you respond to the IRS letter, write out a brief summary of what happened and your belief that the IRA custodian incorrectly completed the 1099-R, and then attached the two documents showing that the custodian and the plan administrator both participated in a trustee-to-trustee transfer.
Don't call the IRS, unless the letter gives you a specific number to contact; the reason is that the IRS letter indicates that someone has been assigned to this "case", and you want to communicate only with that person or office (unless the letter says differently).
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