1099-R not received from receiving Brokerage firm that set up Roth account from a transfer of pension lump sum

[millerfour]

1099-R not received from receiving Brokerage firm that set up Roth account from a transfer of pension lump sum of sending firm that sent 1099-r with 2a of zero and total distribution box checked and box 7 has a G.  Do I report the 1099-r as received or do I change the form?  The sending firm said it was correct and the receiving firm says they did not issue a 1099-r since money was only deposited and not withdrawn.  Do I do nothing and assume all well or why would i want to correct it?

[dmertz]

Forms 1099-R are issued by the financial institution that makes the distribution, not the financial institution that receives the rollover.

The code-G Form 1099-R is required to be entered into TurboTax.  Because the rollover went to a Roth IRA, the code-G Form 1099-R should have amounts in boxes 2a and 5 that total to the amount shown in box 1, otherwise the form is reporting a direct rollover to a traditional IRA.

[millerfour]

I guess I wasn’t clear this pension non Roth was rolled over to a Roth and the receiving did not send a 1099-R.  So what do I do as the 1099-R from the sending firm is not correct or the receiving firm did not send a 1099-R so someone somewhere dropped the ball.  Does the IRS run any sort of job to figure this out?  I assume file and reported to me and the IRS will send corrected form if something is wrong.

[dmertz]

There is nothing for the receiving firm to report on a Form 1099-R.  The reporting on your tax return is done by entering the Form 1099-R issued by the originating firm.

The $0 in box 2a of that form suggests that you requested that the originating firm roll the funds over to a traditional IRA but you diverted the funds to a Roth IRA instead.  If you did tell the originating firm that the rollover to to be to a Roth IRA, they need to correct their mistake on the Form 1099-R.  If you did not tell the originating firm that the rollover was to be to a Roth IRA, the originating firm has no obligation to change the Form 1099-R and you would need to do that yourself by entering into TurboTax a substitute Form 1099-R (Form 4852) showing the correct taxable amount in box 2a with explanation.  I believe that filing a substitute Form 1099-R forces you to print and mail your tax return.

[millerfour]

Great response.   Since I am not great at this what if I left as reported by all the firms?  Would IRS just send me a bill with interest down the road?  When I called originating firm they said was reported correct by them and that form says to call originating firm which I did.

[dmertz]

Without reporting correctly, you would be underpaying taxes, and, given that you know that the filing would be incorrect, the tax return could be considered to be fraudulent.  The IRS may or may not detect that underpayment by comparing the reporting on your tax return with the Form 5498 that the receiving Roth IRA custodian will generate reporting a rollover to the Roth IRA and looking at any other Forms 1099-R that you received.  It's possible that the error could be detected sometime in the future after significant penalties and interest have accumulated.