This time of year we deal with this exact demand far more often than anyone would believe, the CPA that demands a 1099-R that they believe is necessary to report an IRA to IRA Transfer. It usually doesn’t take very long to explain and educate the accountant on the difference between an IRA to IRA Transfer (non-reportable) and a Distribution and Rollover (reportable). A few will be very persistent and we will have to go as far as having them go through Publication 590 and read to them the specific pages that cover how you move assets from one retirement plan to another.

This accountant that we are currently dealing with takes the cake. Nothing we say or show him can convince him that it is ok for him not to have a 1099-R for the withdrawal of funds from his client’s IRA account. We have repeatedly explained that the other iRA Custodian sent us a transfer request and the funds were sent directly to that IRA Custodian, resulting in a non-reportable IRA to IRA Transfer. He insists that in his many years of being an accountant he always reports IRA to IRA transfers and he always gets a 1099-R without question. I’m at my wits end. I have explained what would happen if I issued a 1099-R (which I will not do under any circumstances) showing a distribution with no 5498 being generated by the receiving IRA custodian reporting a rollover, and still they insist that we have no clue what we are talking about.

Is there any resource out there for accountants to explain what seems like a ridulously simple transaction to understand?