Question

1099-R distribution code =1 but should be a '2' as it was a QDRO

Forum|Forum|6 years ago
August 6, 2019
1 reply
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The IRS sent me a letter stating I owe them 10% penalty.

There was evidently a mistake on my 1099-R where distribution code =1 but should be a '2' as it was a QDRO, but I withdrew online which did not have the option to state the reason for withdrawal.
1) It should be easy enough to respond and show the IRS copies of the withdrawal confirmations showing that is was from a QDRO pre tax account, correct?
2) However, I am now almost 1 month past the reply by date, and I don't know it I am better off having a tax CPA (tax defense, or knows the IRS well, to reply on my behalf, or can I simply mail it back now? Notification letter June 10th '19, reply due date July 10 '17, today is Aug 6th.

macuser_22

When you entered the 1099-R, you shroud have selected "Alternate payee under QDRO" as an exception to the penalty, but since you did not, you should call the IRS on the number on the letter and explain to them and then follow there instructions is they want you to amend and sent the amended return to the address on the letter - not the normal amend address or it will not answer the letter.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**