Excess IRA Contribution 20K

[mrichman333]

A client took over his 90 year old mothers finances, who cannot contribute to a IRA.   However he did not know this or that there were limits.  He made the contribution via phone and the rep. at Vanguard allowed the contribution.  He made a $20.000 contribution 01/18 and took out $55,000 09/18.  Vanguard issued a 1099R for the $55,000 and while they admitted they were wrong said there is nothing they can do.  He never filled out a excess contribution removal form.

Since the money was removed before the due date of the return, I believe I can NOT include it in income, and when the IRS contacts him about the difference as reported on the 1099R we can explain what happened.

Not sure how else to proceed

[Catherine]

Write up all the details now, so when the letter arrives in six to eighteen months, you won't be trying to remember the details.  Get statements and confirmations, too, to back up the case.

[mrichman333]

12 minutes ago, Catherine said:

Write up all the details now, so when the letter arrives in six to eighteen months, you won't be trying to remember the details.  Get statements and confirmations, too, to back up the case.

Thanks