Ira 2006/2007

[Brian E]

I have a client who made their 2006 IRA contribution in January of 2007. We took it as a deduction on the 2006 tax return.

Recently the client brought in a statement and the mutual fund company considered it a 2007 contribution. The client called the fund company and the company would not reclassify it as a 2006 contribution. Surely this should be an easy thing to resolve with a little cooperation from the fund company.

Any suggestions? I am sure this is not a unique situation.

Thank you!

[DTS]

Brian

I believe the fund company can assume the '07 year, if not specified by your client, according to TTB, pg. 13-9.

I had a client that had a similar situation regarding a miscommunication and some bad advice from the trustee who talked my client into a Roth contribution instead of the Traditional that we deducted on the return. My client went in, strongly raised the issue and got the contribution changed to the correct account.

Seems like he can do the same and make them do some work that they don't want to do??

Dennis

[sea-tax]

Most fund companies that I deal with will reclassify the contribution date if it was allocated to an incorrect year. I think your client needs to get on the phone with the fund company or his financial advisor and start talking to the fund company. Go right to the top, ask for a manager this is not that uncommon.

As a side note one more reason why it can be a good idea to be in the fiancial planning business, my clients who I manage money for never have these types of issues.

[ChEAr$]

Also

in conference with that manager, make no bones about possibility of walking away
and rolling over to another fund.

Ifyougetmydrift.

[sea-tax]

in conference with that manager, make no bones about possibility of walking away
and rolling over to another fund.

Ifyougetmydrift.

Ahh the old trump card, I will take my ball and go play somewhere else. Good advice but I would use this as a last resort. Most fund companies have 100 of millions if not billions of dollars invested. For a small amount of money I am not sure it is going to matter.

But anything is worth a shot.

[JohnH]

Wallking away not about the company

I think the idea of walking away is very little about the mutual fund company's size, but mostly about the needs of the client. Except for the government, I don't do business with anyone whose service is unacceptable.

So if I were the client I'd be sure they have the right info & give them one chance to correct their error. If they don't, then I'd find another company (& maybe another adviser), and never look back. I wouldn't bother with threats, cajoling, or complaints - just move on. This is such a simple thing to correct that in my mind it would call into questions their entire operation's ability to function efficiently, which is tied to the fees they are charging and potentially depressing their performance.