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OT: Distribution Do Not Report

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    OT: Distribution Do Not Report

    I just need to get this off my mind... and you all the only ones that know what I would be talking about. So it is a little Rant.

    New client came in last week. Told me she took Distribution out of 401K. I told her I need a 1099R. Got a 1099-DIV for the 401K? I told him to contact his advisor again. This time I received an statement showing distributions throughout the year. Note from advisor saying does not have to be reported to IRS no withholding. I sent an email saying that I knew he told my client there was no 1099r but there had to be if there were distributions to please look again and send me the form. I was not short sounding in the email, just saying the facts.

    Geez, I do not know what happened but client called and left me several messages this morning about how mad I made her financial advisor. That I did know anything about 401Ks, did not understand that the distributions did not have to be reported one, and finally if I did no know how to handle it to give him his papers back. She was irriate. I've never had a person act like this with me before.

    So I told her to come by to get the papers. Signed off on letter saying that she got it. She was huffed up... did not say anything... and would not come in the office. She asked for what the advisor sent me. I told her to come in and not to stand outside. While printing, I explained that I was told and sent records showing distributions and I just wanted the return prepared correctly. She settled down a little then. I tried to explain where I was coming from... not sure if she got it or not. She said she did not know me very well but had known him much longer and he controlled her investments.

    I just left it. I understand there are transactions that go on in an retirement account that are not reported but money the taxpayer receives has to be.
    I did not charge for my time... really a simple return, glad I found out now than later.

    Makes me consider taking referrals only.
    Last edited by geekgirldany; 04-02-2014, 03:26 PM.

    #2
    Was the "financial advisor" an individual? And what was the investment in? Usually these are with major custodians, and they would issue the 1099R. Did the statement you receive identify it as a tax-deferred account?

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      #3
      The situation may be, among other things, a sham with the "financial advisor" running a Ponzi-type scheme or something similiar. Or it may have been a retirement account that was distributed some years ago to an otherwise taxable investment account (thus no 1099R). For all the yelling, it looks more like a scam. Google might help.

      Good news is you get to move on.
      Friends double; family triple. Don't buy an audit for yourself. If someone has to go to jail make sure it is the client. Remember it is only taxes, nothing important.

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        #4
        Yes the advisor was an individual but the 401K was with a large investment company like Wells Fargo (not that exact company).

        The paperwork I got had different funds listed with distributions from each fund. The paperwork had 401K on it. Another set of papers had individual transactions listed with net amounts and listed trade and sale date. Statement shows no "value" in 401K as of March 2014. So that is why I was sure all moneys had been distributed.

        Did I totally misunderstand? I am the first one to admit if I am wrong... but don't like being jumped on to.
        Last edited by geekgirldany; 04-02-2014, 11:55 PM.

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          #5
          The financial advisor's reaction alone is enough to make me suspicious. If he is in the right, he should be more than willing to explain himself - not insult your professionalism. I had a situation like this a few years ago and all my suspicions were eventually confirmed - he was a crook from day one. My client ignored my warnings and got taken to the tune of most of her retirement. Sad situation.
          "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

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            #6
            I am just glad I found out sooner than later. Ex-client was very concerned about him getting so mad.
            Last edited by geekgirldany; 04-03-2014, 12:13 AM.

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              #7
              She had better take her paperwork to someone and pay them to go over everything in detail.
              If you and she concerned about his behavior, I'm guessing you are both reacting intuitively.
              Never ignore intuition; sometimes it's mistaken, but more often than not it's right.

              Amazing how people will work & save all their lives, and then entrust their financial info to someone else without having some checks and balances in place.
              "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

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