Hooray, the IRS has decided that IRA or 401k money turned over to state unclaimed property fund due to lack of activity is subject to withholding.
This may have the beneficial side effect of notifying the original owner, via the 1099-R, that they still have money sitting out there somewhere.
On the other hand, it does lessen the benefit of a related ruling, which says that money sent to state unclaimed property is a valid reason to self-certify a waiver of the 60-day rollover rule (in that the withheld money would have to be made up from somewhere else in order to successfully roll over the full amount).
This may have the beneficial side effect of notifying the original owner, via the 1099-R, that they still have money sitting out there somewhere.
On the other hand, it does lessen the benefit of a related ruling, which says that money sent to state unclaimed property is a valid reason to self-certify a waiver of the 60-day rollover rule (in that the withheld money would have to be made up from somewhere else in order to successfully roll over the full amount).