1099-R not produced

[neilbrink]

My client transferred directly an IRA account from Merrill Lynch to his local bank. I have the local bank's documentation of this. Since I did not have the 1099-R with the Code G verifying this, and the client said he had never received one, I asked him to call Merrill Lynch to see if they had in fact issued the 1099R. Merril Lynch said no, that since it was a direct transfer, they were not required to issue the 1099-R. Has anyone else run into this situation before?

[jainen]

>>since it was a direct transfer, they were not required to issue the 1099-R<<

That's news to me too, but the Instructions for Form 1099-R do indeed say, "do not report a transfer between trustees or issuers that involves no payment or distribution of funds to the participant, including a trustee-to-trustee transfer from one IRA to another IRA,"

[MsTabbyKats]

Merrill Lynch is correct. If the client never touches the money, then the firm from where the money is coming from doesn't need to issue a 1099-R.

[Jack from Ohio]

>>since it was a direct transfer, they were not required to issue the 1099-R<<

That's news to me too, but the Instructions for Form 1099-R do indeed say, "do not report a transfer between trustees or issuers that involves no payment or distribution of funds to the participant, including a trustee-to-trustee transfer from one IRA to another IRA,"

Yet I had a client that received a CP2000 for "income not reported on a 1099R" and even on the notice the code in box 7 was G. They do indeed look, but most of the time without their glasses on.

Merrill Lynch is not exempt from reporting any transaction over $10,000 to the IRS just as any other financial institution does.

[neilbrink]

Since Merrill Lynch is saying that they have not, nor are they going to, issue a 1099-R to my client, then can I assume they also will not produce one for the IRS? By the way, it was a $17,400 transfer.