1099 R Code P

[Rlmea]

Client received a 2010 1099 R code P (Gross Distribution $4,000 Taxable Amount $4,000). I understand that this code represents an excess contribution for a prior year (2009). The reality is, the taxable amount listed ( $4,000 )was not taken as a deferral in the prior year anywhere on the taxpayer's return, as it actually was an eligible Roth Contribution, which the brokerage firm misclassed as a Simple IRA contribution (thus the excess). Can I amend 2009 and report the gross distribution, but report that none of it was taxable, based on the fact that there was no tax benefit to the taxpayer? I hate to have to try to get a corrected 1099R as I do not have much faith in this brokerge firm (which will remain nameless) due to prior encounters in trying to get them to correct past reporting errors.

Rlmea

[rgtaxservice]

...

Don't amend the 2009 tax return just so it will jibe with an incorrect 2010 1099-R. Explain the situation to the taxpayer and have them request a corrected 1099-R. If one is not forthcoming, file a paper return reporting the facts...with an explanation. Document the misclassification. So what if it might generate a CP2000. If you're in the right, the facts speak for themselves.

Never bend the return to fit the broken paperwork. Request the corrected 1099-R.