IRA Contribution Instructions Not Followed by Broker
My clients instructed their broker to make their 2010 IRA contribution by transferring cash form an investment account into their IRA accounts in an email. The broker overlooked the instructions and only now realized the error. Obviously, the IRS will ultimately send a notice unless an amended return is filed. If there anything at this point that could be done at this point to preserve the deduction to 2010?
Permalink Submitted by Alan Spross on Tue, 2011-05-24 19:27
About all he can do is pressure the custodian to restore the contribution, and the success of that effort probably rests on the evidence he has that they received the request with reasonable time to act. If sent 4/14 or later, they may have a valid excuse. What makes the broker less inclined to cooperate now is that they probably already processed their 5498 forms for 2010.
If the broker will not cooperate, he will need to amend the return ASAP to reduce the late interest on the tax due.