This is topic This is my own fault, but any advice would be appreciated - update, closing notice in forum Books, Films, Food and Culture at Hatrack River Forum.
I got a letter from the IRS today saying they are proposing changes to my 2002 tax return because the information I reported doesn't match what was reported to them by my employers, banks, or other payers. According to their calculations, I owe them an additional $934.
Here's the scoop: I had a 401K plan from a previous employer that I was just kinda ignoring. It was around $4000, and when I left the company my boss said something along the lines of "It's in a good plan, it won't hurt you anything to just leave it there and let it grow." I was a stupid kid, and did so. I then moved a couple of times, and didn't change my address with the company in question. See stupid kid statement above. I've been thinking lately about how I really should track that account down and get the money rolled over into my IRA.
Apparently in 2002 they sent me a check for the amount in the account and withheld the appropriate taxes. Or, rather, about half of the appropriate taxes. I think this is because the company in question doesn't exist anymore and the amount in my account wasn't big enough for the financial company to bother with.
I never received or cashed the check.
The company I worked for no longer exists.
The company listed on the IRS paperwork as disbursing the funds is State Street Retiree Services in Boston, MA. It does not come up in a google search or DexOnline yellow pages. There is not a phone number listed, only a PO Box address.
The IRS needs to receive my response by 11/17 or they "conclude that their proposed changes are correct." I need to respond with supporting documents.
If I could contact the company, confirm that the check was never cashed, and hopefully get a new one, I would have no problem paying the early withdrawal penalties for not having it rolled into an IRA when I should have. But I really don't want to pay them on money I never got.
If no one has a better idea, I will try to find the last paperwork I got on this account and go from there to try to get contact info for the company, and if all else fails send the IRS a letter explaining the situation and asking for more time to prove I never got the money. So, does anyone have a better idea?
Thanks for reading... and in advance for your help.
[ December 31, 2004, 10:51 AM: Message edited by: ElJay ]
Posted by Kwea (Member # 2199) on :
ELJay, that sucks. I would despute that amount to play for time, and then explain what happened.
Worse case situation is that you can arrange a payment plan with them.
Good luck!
Kwea
Posted by quidscribis (Member # 5124) on :
I guess this would be a bad time to mention that, where I'm currently living, I pay no taxes?
Posted by Dagonee (Member # 5818) on :
If you can prove you didn't receive the money, you won't have to pay taxes. Proving that will be difficult and may require a very painful audit.
If the financial company is still around, I'd get in touch with them first. Try to get proof the check was cashed.
Whatever you do, don't miss the IRS deadline.
Dagonee
Posted by Goody Scrivener (Member # 6742) on :
quote:The company listed on the IRS paperwork as disbursing the funds is State Street Retiree Services in Boston, MA. It does not come up in a google search or DexOnline yellow pages. There is not a phone number listed, only a PO Box address.
State Street manages my firm's profit sharing plan. In fact, I just received my quarterly statement today. So they are in fact still in business. I only have a P.O. box for them as well.
Does your state have an "unclaimed money" division in their department of revenue? In Illinois it's called Cash Dash. If a legitimate attempt to pay money owed is unsuccessful, the funds are sent to the Department of Revenue to be held until such time as the claimant finally comes around. I discovered late last year that I had a final paycheck from a company I'd worked for almost 10 years ago sitting there - and my tax statements at the end of the year did in fact reflect that income. Try going to the website for your DOR and see what you can find.
As for the IRS, you may be able to get an auditor to waive penalties based on the money being in your state's equivalent of Cash Dash for all this time, but I don't know. You'll definitely owe the actual income tax on that distribution, though, which is of course all the more reason to track down those funds so you can cover the tax hit. All you can do is talk to the agent about that part and do so quickly, and see if you can request an extension to handle the actual payment.
[ October 21, 2004, 10:54 PM: Message edited by: Goody Scrivener ]
Posted by Kwea (Member # 2199) on :
Goody, that is a great idea....MA just started advertising the same thing for residents...basically "come and get your money!".
That might be a help, ELJay!
Kwea
Posted by ElJay (Member # 6358) on :
Dagonee & Goody, thanks! I definately won't miss the deadline, and I'll check with the DOR first thing... if the money is there, that would rock.
Posted by ElJay (Member # 6358) on :
*sigh* It couldn't be that easy. There's a list on Minnesota's Department of Commerce website, and I am not on it. A Dana Williams is though, with no address attached, dkw you should check it out.
It was kinda like checking lottery numbers...
Posted by Kwea (Member # 2199) on :
What...don't I count?
J/K, they had some constructive advice....lol...
Kwea
Posted by ElJay (Member # 6358) on :
Posted by ElJay (Member # 6358) on :
Here's my letter to State Street, which will go out priority mail tomorrow with any corrections y'all suggest before I leave for work:
quote: State Street Retiree Services for Innuity Savings Plan PO Box 1389 Boston, MN 02104
October 21, 2004
Attention: Unclaimed Property
I received a notice from the IRS today of proposed changes to my 2002 income tax return, based on information reported to the IRS by your company that I did not include on my return. The identifying informtion provided is as follows:
Liza J. Williams <removed>
I am aware that this is from a 401K plan that I had with a previous employer. I also am aware that I moved without providing a forwarding address. As a result, I never received this disbursement and was unaware of it until opening my mail this evening.
Please research this issue for me and determine where, exactly, this check was sent and if it was ever cashed. If it was cashed, please send me a copy of the front and back of the canceled check. If it was not cashed, please send me a replacement check as soon as possible.
If you need to contact me, I would prefer you do so by phone or e-mail so as to expedite this matter, as I am curently in arrears to the IRS and will not be able to pay them without settling the issue with you first. My contact information is as follows:
[ October 21, 2004, 11:38 PM: Message edited by: ElJay ]
Posted by Goody Scrivener (Member # 6742) on :
Your letter looks good. N.B. though, it's 401(k), not 401K. Refers to a specific section of (I think) US Revenue Code.
Were there any L. Williams' listed on the DOR site? I know the Illinois list has lots of first initial last name entries. If not, perhaps State Street still has this money, especially since this is 2002 tax year. It might simply be early enough in processing that it didn't get all the way to DOR submission.
Posted by ElJay (Member # 6358) on :
There was one L. Williams, but the address was not anywhere I'd lived and the amount was not right. and you're right about the (k), thanks. Wasn't thinking. Posted by quidscribis (Member # 5124) on :
ElJay, you're a girl!!!!
I don't know why, but I thought you were a guy.
Not that I know anything about US tax law, but yeah, the letter looks good. One thing I would add, though.
"Please send me as soon as possible by mail a letter confirming the status of this check."
See, they may not issue the check for months, but getting the letter now may help your fight with the IRS, and it's likely that the IRS will require official correspondence from them on letterhead.
But now, as I think about it, you've specified that you prefer to receive correspondence via phone or email. I think it would be better to specify correspondence via phone or email AND letter so that you have hardcopy to provide as proof to the IRS. At least, for anything/everything that will help you in your fight against the IRS.
Posted by ElJay (Member # 6358) on :
Actually, I was thinking of adding my work fax number and requesting written confirmation that way.
And yes, I'm a girl. I dunno what kind of guys you know, but you've been active in my mouse thread and I don't personally know any guys who would admit to being scared of mice.
And I don't really think of it as a fight against the IRS... I prefer to think we are working collaboratively to get this worked out to both of our satisfactions. Posted by quidscribis (Member # 5124) on :
Whereas I used to be an accountant, and personal experience dictates that I view all interactions with any section of the government as possible opportunities to become a fight if not subverted in time. Whew! That sounds paranoid! In other words, do absolutely everything you can to protect yourself in any way possible. Document everything, every single phone conversation. Write detailed notes.
Laurie's law states that if you have them, you won't need them. But if you don't have them, you're scr*wed.
I know guys who admit to being scared of mice. Or spiders. Or something. I'm pretty sure I do. I dunno - I still thought you were a guy despite the mouse thing. But as I think about it, the chocolate bit should have given you away. Posted by ElJay (Member # 6358) on :
Oh, I fully intend to document everything. Just 'cause I'm friendly doesn't mean I'm stupid.
And Noemon's a guy, and he's as weird about chocolate as I am, apparently. So I guess there's just no telling.
[ October 22, 2004, 12:46 AM: Message edited by: ElJay ]
Posted by quidscribis (Member # 5124) on :
Oh hey, ElJay, I would never assume you were stupid. But there are plenty of smart people who don't document and then get into all sorts of trouble. I've met a lot of them. No, wait, they were clients, and that was what they did before they hired me.
And I kinda thought Noeman was a guy - mostly cuz when I see his name, I think of Newman from Sienfeld. Poor guy. Noeman, I mean. Not Newman. Posted by Bokonon (Member # 480) on :
Just to let any other fledging workforce compatriots out there know, if you switch/lose your job, and your 401(k) has less than $5000 in it, the money management company will almost ALWAYS send you the money. This happened to me after working at IBM for a year (though I was able to use the internet, and IBM's and my new company's HR depts. effectively). If you know this is going to happen, or want to rollover your plan to your new jhob's 401(k), be sure to try and and get a "checkless" transfer/rollover. This reduces tax complexities that you might get involved in if they directly cut a check to you.
Good luck ElJay, I hope it gets resolved soon (and in your favor)!
-Bok
Posted by Arthur (Member # 4026) on :
ElJay - I am awaiting for an answer form my mom. She is the education coordinator for the IRS in the eastern US. As soon as I get an answer I'll let you know.
[ October 22, 2004, 10:16 AM: Message edited by: Arthur ]
Posted by ElJay (Member # 6358) on :
quidscribis, I knew you weren't implying you thought I was stupid... sorry, that was an occasion where a would have worked.
See, the account was over $5000, before they withheld the taxes, and they kept it for at least 5 years if they sent the check in 2002. Not like that matters, but it makes me grumpy.
Authur, you are my hero. Thank you so much for asking, that is fabulous.
Posted by Dagonee (Member # 5818) on :
One thing - it's almost always better to rollover your 401k to an IRA than another 401k. Your investment options are far less limited, and you will almost definitely lose less money to operating expenses, as long as you select your funds carefully. I use Vanguard; there are others as well.
Dagonee
Posted by Sara Sasse (Member # 6804) on :
Arthur, what a kindness. Posted by Arthur (Member # 4026) on :
Eljay, This is what my mom said to do - Check box two on the letter saying that you do not agree and put in a note explaining what you said in the letter. Tell them that you will try to get information on the check. DO NOT SIGN THE LETTER. If you do that means that you agree with it. Then try to get proof that the check was never cashed or was cashed by someone else if you never got it. I would go back through your bank records if you can to be sure you didn't cash it and deposited it in your account and forgot about it. You got the letter because the company reported a distribution for that amout made to you. The IRS doesn't know if it was cashed or not, only that it was sent, because that's what the company reports.
You certainly do not want to pay the penalities and charges that were added on - especially if you never cashed the check. I hope this helps! If you need anything else please let me know.
Posted by Belle (Member # 2314) on :
I nominate Arthur for Hatrack Hero of the Day.
Posted by Dagonee (Member # 5818) on :
Do we have an expert on everything here? I'm having some trouble translating some ancient Sanskrit...
Posted by BannaOj (Member # 3206) on :
Boon is the other tax guru around here, but I think she's got personal issues keeping her away at the moment. But it sounds like for the moment you are set with what you need to do. I actually work across the street from one of the big IRS regional branches, but you can probably get the forms you may or may not need off the internet or locally in MN. But if you need anything specific let me know and I can get them for you if worse comes to worse.
AJ
Posted by ludosti (Member # 1772) on :
Dag - If I remember correctly, my little brother reads Sanskrit....
[ October 22, 2004, 01:34 PM: Message edited by: ludosti ]
Posted by ElJay (Member # 6358) on :
This is one of the many, many reasons I love Hatrack.
Thank you so much, Arthur, and please thank your monther for me.
I sent the letter to the financial company today, certified mail, and I will fill out the form to send back to the IRS tonight with a letter and a copy of what I sent to State Street.
I'm breathing somewhat easier now... plus, I have stomped my mind back under control... I will admit that I had thoughts about what I could do with the rest of that $4,450 check once I had paid the taxes, assuming I ever get it. But the answer, of course, is that it is part of my retirement savings and I can put it right back into them where it belongs. (not motorcycle, not motorcycle, not motorcycle.)
[ October 22, 2004, 01:31 PM: Message edited by: ElJay ]
Posted by Lost Ashes (Member # 6745) on :
Always found it odd that the IRS doesn't have to work on the premise of innocent until proven guilty.
In a perfect world, you could just simply ask them to provide information that you had received and cashed the check. Posted by Narnia (Member # 1071) on :
[aside] That's funny that you should say that Dag. Just the other day when I was reading Kat's candy/feeling like crap thread, I learned about the dehydrating effect that sugar has when you eat it. That made a lot of sense to me and actually could explain some of my problems. I relayed this information to my mother and she said "Where'd you learn that?" I simply said "Hatrack." and she answered with "Oh. Ok." It's funny that my family excepts Hatrack as a reliable source for expert information on any subject! Cause it is!! [/aside]
Posted by Arthur (Member # 4026) on :
No problem Eljay- I don't have a lot of stuff to talk about here so whenever I can help I'm glad to do it. Good luck.
Posted by closeyourmind (Member # 5916) on :
Hi LJ. I did a search for the PO Box and the zip code that was listed in your letter and there was a number associated with it. Check out the next to the last entry on this website. Under Employee Benefit Plan Participants. It might be a long shot, but you can try calling that number.
Also, State Street has a website, statestreet.com, and their corporate office is in Boston. There's a number on their website that you can also try calling.
Hope everything works out for you.
Posted by ElJay (Member # 6358) on :
closeyourmind, you are also ubercool.
Arthur, I don't have a lot to talk about either, but that's never stopped me. Regardless, you seem to be the expert of the day in both of my threads today, so that's kinda neat.
Posted by ElJay (Member # 6358) on :
I am floored. I called the number off statestreet.com and they pulled the account right up, said they merely administer these accounts for another company so when the check wasn't cashed they sent the money back to the other company. They provided me with an 800 number and a plan number to reference.
I'm on hold now...
Posted by Dagonee (Member # 5818) on :
Wow. That's pretty good response. Keep going - maybe you'll get to the bottom of this today.
*fingers crossed*
Posted by Sara Sasse (Member # 6804) on :
Awe ... some.
(Yay, Hatrackers. )
Posted by ElJay (Member # 6358) on :
The chase continues... if I was at the same address they could just send another check, but with an address change they need authorization from the plan administrator. They gave me a name and last known phone number and her last known home address. If that information is not correct, I need to contact the department of labor, which they also gave me the number for.
I'm not getting much work done today, but this is kinda fun.
I'm also wondering if I have any shot at being allowed to still put this into my IRA and make up the $899 that was withheld for taxes and not be penalized on it. I think the chances are pretty slim, but I will certainly try.
Here goes the next call...
Posted by katharina (Member # 827) on :
This is very cool. I love Hatrack - greatest resource EVER.
Posted by zgator (Member # 3833) on :
If nothing else, it seems like you wouldn't owe the IRS until this year's taxes.
Posted by Dagonee (Member # 5818) on :
The time limit is from when it's disbursed. If they count that from when the new check is cut, then you can roll it over. Find out before they cut it, and have them do it so it rolls over.
Good luck.
Dagonee
Posted by Arthur (Member # 4026) on :
If you get them to roll it into a current/new 401(K) then you don't owe taxes on it until you actually take it out. Tell them you would rather do that than to have them cut you a new check and give them your information Posted by ElJay (Member # 6358) on :
Number disconnected.
Found her in the white pages.
Boy, was she surprised!
She agreed to call and request the check. I looked in her and saw Dagonee's very good advice and called the company back up.
The rep had to check on it, because he thought it was a valid question, but came back and said that they would not be able to do that.
However, I also found out that once she approves the request I should receive the check in 10 days. It was not yet noted on the account that she has called in, but I called pretty quick so it might not be there yet...
Posted by Dagonee (Member # 5818) on :
When mine rolled over, I got the check but it was made out to Vanguard. This qualified as a successful rollover.
They might not have the right to refuse to rollover for you. If you have an IRA, call them and ask them for info on rolling a 401k into your account.
They're always happy to help with that.
Congratulations on tracking her down.
Dagonee
Posted by Intelligence3 (Member # 6944) on :
Woot!
Posted by Sara Sasse (Member # 6804) on :
Feel the love.
Posted by Noemon (Member # 1115) on :
This is great ElJay!
In a way the community here functions as kind of a gestalt being, you know?
Posted by ElJay (Member # 6358) on :
It's not quite over yet... one more complication.
Posted by Noemon (Member # 1115) on :
What?
Posted by ElJay (Member # 6358) on :
The reason they needed the plan administrator's approval is that there is a $25 stop check fee that needs to be paid. Since the company I worked for no longer exisits, they ain't gonna pay it. So I have to send a certified check for $25 to New Jersey, and then they'll send me the check. *deepbreaths*
Posted by Noemon (Member # 1115) on :
Well, that's too bad. Could you pay with a credit card or something so as to hurry the whole process up?
Posted by Arthur (Member # 4026) on :
I would question that - if the check has not been cashed it should have been returned to them (seeing as how you had moved)and then you shouldn't have to pay a stop request, besides the check is 2 years old and should not be able to be cashed.
Posted by ElJay (Member # 6358) on :
I did question it, for just those reasons. They said that if the check was being sent to the same address it would be an issue, but to send it to a different address they needed to do it this way. Which says to me that it's not really a stop-check fee, but some other administrative fee, but that's what they insisted on calling it. And they will only accept a certified check.
Posted by Dagonee (Member # 5818) on :
Annoying, but if that's the only obstacle you're doing real good.
Dagonee
Posted by ElJay (Member # 6358) on :
I kinda thought so. I've got the check, writing the letter to send along with it.
Posted by closeyourmind (Member # 5916) on :
Wow. I'm glad things seem to be working out well. Hopefully the roll over can still happen.
Patrick Brown
Posted by Arthur (Member # 4026) on :
Eljay, You have 60 days from the date on the check to roll it over - even if it is made out to you, then on your 2004 taxes you would list the amount and write rollover next to it you will owe no taxes until you withdraw it from your 401(k). If you want to keep the money and use it now you will report it on your 2004 taxes and pay tax on it normally without being charged the interest and penalities.
[ October 22, 2004, 08:24 PM: Message edited by: Arthur ]
Posted by Bob_Scopatz (Member # 1227) on :
This has been an amazing day! Great that it works out so well.
the tax penalty on using your retirement account money is so high that you'd be better off rolling it over than EVER spending it at this point. You can finance the motorcycle another way and lose a lot less in taxes.
Posted by ElJay (Member # 6358) on :
Arthur... are you sure? The financial company seemed pretty sure that I would not be able to do that and would have to take the tax hit. I would love to be able to do this instead... although I still need to come up with $900 that I hadn't been planning on. 60 days is plenty, however, to take care of that.
Bob -- I was kidding on the motorcycle. This is retirement money, and that's where it's staying, one way or another.
Posted by Boon (Member # 4646) on :
Even if Arthur's not sure, I am. Just make sure you add the amount withheld for taxes when you roll it over. (The amount withheld will then show up as a credit on your return, so you won't really be out that money...but you will have to come up with it first.)
It's usually best to email me if you need to ask me a question. AJ's right, I do have some personal stuff going on right now, but I'm happy to help with this stuff. Posted by Kwea (Member # 2199) on :
Boon, you rock!
Of course, I already knew that...
Kwea
Posted by ElJay (Member # 6358) on :
Okay, thank you! The link still doesn't seem to address my exact situation, but I bet it's rare enough that it wouldn't be documented on-line. I will trust my Hatrack experts.
The $899 isn't that big a deal, but I do have to say I'm glad it's October, so I won't be out the money for too long!
Posted by Boon (Member # 4646) on :
[ October 23, 2004, 01:04 PM: Message edited by: Boon ]
Posted by ElJay (Member # 6358) on :
Ah, gotcha. So very literal, these tax laws. Posted by Boon (Member # 4646) on :
Yep, so when you roll it over, just add enough from your personal funds to cover what they held out. That way you'll avoid all penalties for early withdrawal. If you just rollover the amount of the check, you'll still get penalties for the amount of the taxes they held out. Ridiculous, I know...the IRS sucks.
Posted by katharina (Member # 827) on :
But Hatrack rocks. Holy canoli.
Posted by ElJay (Member # 6358) on :
So, the check came on November 3rd, with a date of November 2nd, they overnighted it to me. But I didn't want to do anything with it until I heard back from the IRS, just to be safe. Since I had 60 days, I figured I could wait a while before depositing it.
On December 2nd I got a letter from the IRS. Stating that they had received my letter and would respond within 60 days.
I decided to continue to wait until the week before Christmas to make the deposit. I had until January 2nd, but I wanted to be sure the credit union had time to process it and stuff.
No word from the IRS, and I got busy right before Christmas, so I ended up adding the check plus the $899 of my current funds to my credit union IRA last Monday, December 27.
Last night when I got home, there was an envelope from the IRS. I almost couldn't open it. It's amazing how these things make your stomach drop, even when you're pretty sure you're right.
quote:CLOSING NOTICE
Thank you for providing us with additional information about the issue we recently wrote to you about. We are pleased to tell you that, with your help, we were able to clear up the differences between your records and your payers records...
YAY!
Thank you, once again, to all of Hatrack for all the wonderful advice and support I got on this thread. It really helped, both with knowing what to do and fighting down the initial panic. And I promise to be more responsible with my retirement funds going forward. Posted by twinky (Member # 693) on :
Posted by Dagonee (Member # 5818) on :
You handled this well from the get-go. Congratulations!
Now you just need to get your IRA into some kind of index fund.
[ December 31, 2004, 11:00 AM: Message edited by: Dagonee ]
Posted by Sara Sasse (Member # 6804) on :
Wow! Posted by ElJay (Member # 6358) on :
Totally wow.
It's in on of the credit union CDs now, I'm not sure if index funds are an option. I reevaluate the funds my current 401K are in every January and July anyway, so I'll probably go over my choices on the IRA again when I do that, too.
Posted by Dagonee (Member # 5818) on :
Cool. Long-term investments need to be more heavily in equities (stocks). If your CU doesn't offer them, there's plenty of firms such as Vanguard who will help you make the switch easily.
Asset allocation is the second most common mistake in retirement savings, behind not saving enough.
</end preaching mode>
Dagonee
Posted by Sara Sasse (Member # 6804) on :
*applause
Posted by Katarain (Member # 6659) on :
Just a little question... shouldn't the IRS refund the money already paid to them, since it's going back into a retirement plan?
-Katarain
Posted by mackillian (Member # 586) on :
*dances*
Posted by Goody Scrivener (Member # 6742) on :
WOOOOOOOOOHOOOOOOOOOOOOOOO ElJay!!!!!!!! I'm so glad this all worked out for you!
Posted by Noemon (Member # 1115) on :
Posted by quidscribis (Member # 5124) on :
So glad to hear it all worked out so well! Posted by Boon (Member # 4646) on :
quote: Just a little question... shouldn't the IRS refund the money already paid to them, since it's going back into a retirement plan?
Yep.
quote: Just make sure you add the amount withheld for taxes when you roll it over. (The amount withheld will then show up as a credit on your return, so you won't really be out that money...but you will have to come up with it first.)
Posted by ElJay (Member # 6358) on :
Yep, I'll get it back when I do my taxes, I just had to come up with the difference up front first, so it was the same amount going in.
And Dags, I totally agree with you... over 80% of my retirement money is in stocks. But since I'm a long way from retirement, I probably will end up pushing this money into something more aggressive, too.
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In other words, do absolutely everything you can to protect yourself in any way possible. Document everything, every single phone conversation. Write detailed notes. ![[Wink]](wink.gif)
would have worked.![[Grumble]](graemlins/grumble.gif)
Not like that matters, but it makes me grumpy.![[The Wave]](graemlins/thewave.gif)
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