Incorrect 1099 Treasury Dept will not Reissue, How Handle?

[MMAMBVM]

My mother and I were co-owners on electronic EE bonds, where she was listed first and I was listed second.  My mother passed away in late 2022 prior to 2023 electronic bonds maturing.  While I submitted the necessary paperwork to the Treasury Department to have the bonds moved to my account and my name in 2022, the Treasury allowed the bonds to mature in my deceased mother's account for 2023 (I was told they had a backlog of work).  This means that I have received a 2023 1099-INT in her name and with her social security number.  The final tax return for my mother was filed for 2022, the year of her death, and the matured 2023 bonds belong to me as a co-owner and not to an estate or other entity.

I contacted the Treasury Department to have the 1099-INT corrected.  BUT, even though they agree that I am the one who received the monies, including interest, they refuse to issue a new 1099-INT, informing me that in the situation of death and maturity they do not issue new 1099s.  Instead, I was told by 3 different people to "work with my tax advisor" to submit the information to the IRS.  As per the Treasury "there is something that can be done on taxes that will show that [the monies] are mine" and "this happens a lot" so "submit something that shows to the IRS so I can claim under my social security number" all the monies from the matured EE bonds.

I have tried to contact the IRS--but simply get recorded messages.  So, I am reaching out to the Turbotax community to ask:

1. How do I handle this 2023 1099-INT for these EE bonds that is in my mother's name & SS number, even though I am the co-owner who correctly received the funds and should report them on my tax return under my social security number for tax year 2023?  

2. Are there additional forms that I need to submit with my tax filing this year?

3. Would it be better to submit my tax forms via paper rather than electronically (though I have filed electronically for years)?

Thank you--really appreciate some insight into this situation as I am quite flummoxed especially being told that I am correct but that no new 1099 would be issued by the US Treasury of all places!!

[dmertz]

See page 7 of IRS Pub 559 where it describes the nominee process that the executor or personal representative of your mother's estate needs to follow to transfer the income to you.

https://www.irs.gov/pub/irs-pdf/p559.pdf

[MMAMBVM]

Thank you for your fast response.

I have looked at IRS Pub 559 and reviewed the page you suggested, page 7.  The description in this IRA publication suggested is for what would happen if there was a FINAL RETURN for the decedent to be filed.

In my case, the final return for the decedent (my mother) was already filed in 2023 for tax year 2022 (the year she died).

I now have a 2023 1099-INT that belongs completely to me, though it was issued in her name and SS # that the Treasury department will not change.  

So: am I to just file my return and follow the nominee instructions and say I am receiving all of this income from the 1099-INT?

Am I supposed to file another 1040 for my mother for Tax Year 2023 even though she died in 2022 and the final tax return for her was already filed?

[dmertz]

I think it makes sense to do the nominee process on an estate income tax return, Form 1041.  Page 15 of IRS Pub 559 has some additional information related to savings bonds, but I'm not sure that it directly addresses the issue regarding the fact that the Form 1099-INT was issued to the wrong entity.

[MMAMBVM]

Thank you for the idea.  

While there is not an estate AND the 1099-INT is clearly in my mother's personal name and SS #, I will look into this as a possibility.

And, yes, page 15 of Pub 559 does not really address this issue.

What is such a problem is that this is one arm of the US government (Treasury) that refuses to reissue a 1099-INT to the correct person (me) and tells me that this is a common situation that a tax advisor should just address!

And, the IRS does not make mention in any publication that I have found what to do if AFTER a final tax return has been filed and a 1099-INT is issued incorrectly in a deceased person's name & SS #, how the individual/executor/personal representative should handle it in order to avoid problems.

If there are other suggestions, including other sources to look at, would appreciate that input from the TT community.

[dmertz]

I agree that it's a bit irresponsible for the Treasury not to issue corrected forms under these circumstances.