On the first part of your inquiry. No matter what the issue , one should never look to amend a return until making sure the original was posted / processed, which can be seen on IRS.gov by tracing refund, if there is to be one, or otherwise letting your client check it with an online transcript, which is pretty easy to do now.
On the second part of your question.. having worked for the IRS for 44+ years in exam, retired a few years ago... in theory the IRS should get all the data off 1099 forms and see that the amounts have no tax consequence, but in reality, it does not always happen, If you file an amended return, it will be associated with the original, and if you include an explanation that should answer any potential question. Filing an amended return can now be done e-filed and its quick and easy. You can wait and see if they contact your client by letter, but,,,this is the big thing,,they still don't have enough staffing to review all the incoming mail and at times getting your response reviewed by the right examiner is a challenge. Should you opt for that method, be sure to use the coded envelope it comes with to respond with your answer, not your fancy letter on business stationery. The bar code gets it directed to the proper area as they can get tens of thousands of pieces of mail a day. I didn't want to have an online debate with people but me personally, especially since the IRS has now set up amended return by e-file, it's so quick and easy I would file it with explanation and if your software allows attach copy of 1099.
If you have any questions as to why I take that position, you can contact me at
silvermantaxconsult@gmail.com or 516-302-5455
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Howard Silverman
Enrolled Agent
silvermantaxconsult@gmail.com516-302-5455
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Original Message:
Sent: 02-05-2023 08:46 AM
From: Gerald Cohen
Subject: 1099-R with distribution code G omitted from just filed 1040
I agree with Michael. The IRS should read the nontaxable G rollover code. They may send an inquiry, but I doubt it.
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Gerald S. Cohen, CPA
cell 516 455-0643
Original Message:
Sent: 2/4/2023 8:47:00 AM
From: Michael Resnik
Subject: RE: 1099-R with distribution code G omitted from just filed 1040
Let the returns go as is. When the correspondence arrives, simply
respond with the new 1099R showing no taxable event. Then simply ask
within the letter if the agency wants an amended return since there is
no tax effect.
--
Best Regards,
Michael S. Resnik, CPA
Resnik & Oppenheim CPAs PLLC
Accounting, Tax and Advisory Services
350 Jericho Turnpike-suite 300
Jericho, NY 11753
516-730-1001
Original Message:
Sent: 2/3/2023 3:31:00 PM
From: Mary Sherman
Subject: 1099-R with distribution code G omitted from just filed 1040
Hello,
I just filed a 2022 1040 / NYS IT-201 for a MFJ client who then received a 1099-R with distribution code G in the amount of $60k+. Box 2a is blank, 2b has Total distribution box checked, there's no FWT, and the client said it was fully rolled over to a regular (not Roth) 401k at his new employer.
Since there's therefore no taxable amount, does a superseding return still need to be filed?
If a superseding return is required, would it make sense to wait until the client receives the federal and state refunds expected (totaling about $6k), so that the new filing doesn't slow down the IRS's processing of the refund?
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Mary Sherman
MARY SHERMAN, CPA, CGMA
Hicksville NY
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