efiling 1040 Return for Pension benefit not reported on 1099-R

[NSNM]

I am preparing a 1040 return and NY IT-201 for a New York City resident taxpayer.

Besides other income, taxpayer has pension benefit received from United Nations
Joint Staff Pension Fund (UNJSPF). Fund provided "Statement of Benefit" amount
for the year 2011 on their letterhead. No Form 1099-R was issued. And there is
no "EIN" of UNJSPF.

When I entered data on 1099-R worksheet, without EIN, ATX software showed
message in red "1099-R (worksheet) - the payer's EIN must be entered".

I called UNJSPF to obtain EIN. The responder told me that there is no EIN for the
UNJSPF.

I called ATX to get resolution and they suggested to contact IRS.

I called IRS - after being put on hold several times and talking to fie different IRS
employees during that 1 hr 30 min on phone - no one could give solutions to the
situation I explained - that of efiling a return, with pension benefit received
reported on letterhead without "EIN".

Has any one efiled a return, without EIN for pension beneft, not reported on
Form 1099-R. I know the alternative is to paper file the return which I will do
in the absence of any resolution.

Thanks.

[ChEAr$]

Clearly a job for Super Paper return. Too much time spent on the phone.

[Kram BergGold]

a suggestion

I Was going to suggest putting the amount on line 21. Then I realized due to NY's pension exclusion that you don't want to do that. Paper File is the only way to go.

[FEDUKE404]

Need to determine income category first

I am preparing a 1040 return and NY IT-201 for a New York City resident taxpayer.

Besides other income, taxpayer has pension benefit received from United Nations Joint Staff Pension Fund (UNJSPF). Fund provided "Statement of Benefit" amount for the year 2011 on their letterhead. No Form 1099-R was issued. And there is no "EIN" of UNJSPF.

When I entered data on 1099-R worksheet, without EIN, ATX software showed message in red "1099-R (worksheet) - the payer's EIN must be entered".

I called UNJSPF to obtain EIN. The responder told me that there is no EIN for the UNJSPF.

I called ATX to get resolution and they suggested to contact IRS.

I called IRS - after being put on hold several times and talking to fie different IRS employees during that 1 hr 30 min on phone - no one could give solutions to the situation I explained - that of efiling a return, with pension benefit received reported on letterhead without "EIN".

Has any one efiled a return, without EIN for pension beneft, not reported on Form 1099-R. I know the alternative is to paper file the return which I will do in the absence of any resolution.

Thanks.

You obviously cannot efile due to the requirement for having a valid EIN for the (nonexistent) Form 1099-R. The ATX folks (as well as the IRS foks) should have been able to respond to that aspect immediately!!

Without doing the research, the situation you describe may not even be an appropriate entry for Form 1040, line 16. How are you going to determine the taxable amounts? Is there any possibility the statement you have is merely "benefits" (your words!) amassed and not even a taxable distribution??? (Assumptions should not count!)

If there is truly income, my "guess" would be the UNJSPF distribution likely does not qualify for entry on Form 1040, line 16.

Once you decide the answer to that question, you may be able to report the income on Form 1040, line 21.....and even efile!

Sorry you wasted 90 minutes of your life chasing your tail with the IRS. I've learned that, with rare exceptions, your time can be spent far better doing the actual research yourself!!

FE

[WhiteOleander]

Why not call UNJSPF and ask them? If there was no 1099R, there may be a reason.

[Gary2]

See their beneficiary publication page at http://www.unjspf.org/UNJSPF_Web/pag...page=Documents, or download their tax guide at http://www.unjspf.org/UNJSPF_Web/pag...&page=taxguide .

Bottom line: Pension income is pension income, with or without an EIN.

[FEDUKE404]

Finding the facts

This might be of interest, especially paragraphs 12 and 13:

SOURCE:

http://www.unjspf.org/UNJSPF_Web/page.jsp?role=part&page=TaxGuide

Second technical article:
http://www.unjspf.org/UNJSPF_Web/pdf...Guide_2010.pdf (Especially pages 9 and 10)

Third source:

http://www.un.org/Depts/oppba/accounts/tax/pubs/sticlatest.pdf

Note on page 16 reference to "Statement of Taxable Earnings" ------ is that what you have??
(It appears the UN never issues "IRS" documents of the W2/1099R type.)



B. General principle of taxation of UNJSPF benefits

11. UNJSPF is a "qualified" employees' trust under IRC section 401(a). A copy of the most recent IRS determination letter in which this is recognized (dated 28 April 1977 and bearing the symbol E:EO:7103:O.Resnick) is set out in the annex to the present guide.

12. As a qualified trust, UNJSPF benefits are taxed by the United States in the same way as those of any other such trust - with the single exception that for a non-resident alien these benefits are considered to be from a non-United States source and thus not subject to United States taxation (see para. 8 (b) above). In securing advice or assistance from any lawyer, accountant, tax service or IRS agent, it should be made clear that UNJSPF is "qualified" and that there are no special exemptions or immunities relating to the taxation of the benefits it pays to United States citizens or resident aliens.

13. The general principle by which benefits from qualified pension plans are taxed is that the participant, or his or her beneficiaries, are entitled to recover tax-free the participant's own "investment" in the pension, which generally speaking amounts to his or her own actual contributions to the plan, while any benefits in excess of that investment are subject to taxation (at regular or capital gains rates). The portion of each benefit payment that is subject to tax depends on how that "investment" is calculated and how it is allocated to each benefit payment; an indication of how this is done is given in parts C-H below, and in section VIII, examples A-D, F and I. It should, however, be noted that the taxable portion of the benefit is not merely the sum of the employing organization's contributions plus the interest credited thereon and on the participant's contributions; rather, it is, in the first instance, the difference between the total actuarial value of all elements of the pension (called the "expected return" by IRS and calculated according to IRS rules rather than the UNJSPF tables) and the participant's investment and ultimately the difference between the total amount of all payments received from UNJSPF and the participant's investment.

14. IRS annually issues its publications No. 575, entitled "Pension and Annuity Income (Including Simplified General Rule)", and No. 939, entitled "Pension General Rule (Nonsimplified Method)", which contain full descriptions of the taxation of pensions, particularly those paid by qualified plans, as well as numerous actuarial tables required to make the necessary calculations. (Briefer descriptions appear in publication No. 17, entitled "Your Federal Income Tax", as well as in the instructions for completing line 17 on form 1040 (for 1993).) The remainder of the present section III of the guide refers as far as possible to those official documents, to which retirees and other beneficiaries should turn for additional explanations, detailed instructions and further illustrative examples. An attempt has been made to indicate how various features and provisions of UNJSPF relate to the descriptions and definitions in the IRS instructions.

15. The calculations described below only determine what portion of each UNJSPF benefit is tax-exempt and how much is taxable and, if so, on what basis (i.e., at regular rates, or as a long-term capital gain, or subject to income-averaging rules). The actual amount of the tax payable will depend on the taxpayer's gross taxable income (which also includes any other taxable income) and on the exemptions, deductions and tax credits available.


The answers are definitely "out there" but you will need to do the leg work to find them. I really cannot spend any more time on this issue, but it has been an interesting topic to research.

FE

[joanmcq]

In ATX foreign wages and foreign pensions are reported on the FEC worksheet. No EIN required. Efiles just fine.

[FEDUKE404]

As noted

In ATX foreign wages and foreign pensions are reported on the FEC worksheet. No EIN required. Efiles just fine.

Which is totally consistent with the aforementioned comment that the UN apparently does not issue ANY Forms W2 or Forms 1099-R.

OTOH, trying to "create" an IRS Form 1099-R is both incorrect and will crash any efile containing an incomplete pseudo-Form 1099-R.

FE

[NSNM]

Thank you all for your valuable time and suggestions.

The taxpayer is a former UN employee, retired for the past 8 years.

Previous acountant (CPA) prepared her returns for more than 25 years.
Upon receiving pension income in the Year-1, he established "Annual Tax-Free
Recovery Amount" (constant) based on her contributions to the Plan.
So the "Taxable Pension Income" (variable) was increasing from year to year
based on inflation index.
According to IRS determination letter, the plan is qualified under section 401(a).
Taxable Amount was reported on Line 16 of Form 1040, and on New York
Form IT-201, "exclusion of $20000" was taken in all years.

After reading FE's first response, I researched the same materials (59 pages) he
referred in the second response, it did answer few questions raised by him earlier.
But I could not get answer to, why Form 1099-R was not issued. Perhaps the
guidelines provided by UNJSPF was written in 1989. Since then new IRS regulations
required issuing 1099-R. But UNJSPF guidelines might not have been updated to
reflect the changes in IRS rules. Or they may have exemption from reporting.
I don't know and I could not find it.

As many of you indicated, I want to do the paper return filing. But I will explore
the possibility of efiling with the "FEC worksheet" if it permits. I am not certain,
if the UN income is considered as "foreign income" as indicated in that worksheet.
Because, taxpayer is NYC resident and she worked and receiving pension benefits
from UN office in NYC. I will try to gather additional information from UNJSPF.

I thank you all and appreciate all of your responses and valuable time spent on
this subject.

[NSNM]

ATX "FEC worksheet"

Thanks to Joanmcq for bringing up "FEC worksheet" to the light. I saw that
form for the first time.
And thanks to FE for clarifying and confirming the use of that worksheet
Finally I thank everyone for resolving the efiling issue.

[FEDUKE404]

Additional useful info

After plowing through the sources previously listed, I think you are pretty well on target, including the NY retirement exclusion. I don't recall when the taxation of retirement rules changed, but it is quite possible that a retiree of 25 years could fall within the scenario of having a fixed annual dollar exclusion, versus the now common "Simplified Method" calculations. You really have no choice but to continue with that number...it is probably correct.

While I could not (easily) find references specific to UN pension income, I did find on page 16 of the "third source" the following for UN wages. A reasonable person might surmise something similar would apply to the proper reporting of the UN pension income via Form 1099-R.

"Staff members should note that at the bottom of the statement of taxable earnings there is a paragraph which explains that, since remuneration from an international organization is not subject to withholding, the United Nations is exempt from issuing a wage and tax statement (IRS form W-2) per se. While it is not a requirement of the IRS or state/local tax authorities, staff members may wish to attach a copy of the United Nations statement of taxable earnings to the income tax returns that they file with the appropriate tax authorities."

Getting back to the original post, per the comments by joanmcq, it would appear you may well be able to avoid the "Form 1099-R problems" by using the appropriate software worksheet and then successfully efiling both federal and NY. (And exactly WHY were the ATX folks unable to tell you the solution to your problem????) There remains no doubt that the pension income (perhaps including a "gross" and "taxable" amount) should eventually land on line 16 of Form 1040.

FWIW: When I went looking through my own 2011 tax software, I also found a FEC worksheet. For pension, it shows an entry box for "foreign pension received" and a separate box for "taxable foreign pension amount." There IS a box marked "foreign employer's identification number," so I don't know how critical that is to efiling and/or where you would find such.

Thanks again for a nice learning experience!!

FE

[joanmcq]

The 'foreign EIN number' is not crucial at all. I have one overseas client whose foreign corp does have an EIN, so when I do his FEC worksheet I include it. But most don't.

I just delivered a UN employee's return yesterday-so all of this is VERY fresh in my mind!

[NSNM]

IRS rejected efile

ATX software's "FEC Worksheet" requires boxes to be filled for:

1) Employer's foreign identification number
2) Foreign employer's Name
3) Foreign employer's Street Address
4) Foreign employer's City
5) Foreign employer's State
6) Foreign employer's Country
7) Foreign employer's Postal Code

I did not fill in items (1) and (6)
I filled items (2),(3),(4),(5) and (7) for UNJSPF's New York City location address.
For item (6), there is drop-down country list (A - Z).
But United States is not listed (understand the reason - US is not a foreign country)
As such, I left that field blank.

I checked return before efiling. All cleared for efiling.
EFC allowed transmission of return.
An hour later, IRS rejected the return with rejection code "X0000-005".

It rejected twice. Once for invalid postal code (I used correct NYC zip code),
and second time for invalid country name (I could not fill USA in it).

Joanmcq - How did your return get thru ?
Did you use foreign address (Geneva) or US address (New York) for the UN.
Just curious to know how easily you were able to efile a similar return.
Thank you for any response.