2017 IRA Contribution Lost in Mail
I recently opened an annuity for a client that was a combination of a transfer of CD money in a bank and a $4000 check representing the person’s 2017 contribution. My assistant mailed the check on April 6 regular mail (not tracked) and the check was never received by the insurance company. The replacement check was received by them after the 4/17 deadline.
Is there any way to document the error to the IRS so that the late contribution can be allowed as a 2017 contribution? It was not the client’s error.
Thanks.
Permalink Submitted by Alan - IRA critic on Mon, 2018-04-30 17:23
That issue would need to be resolved between the client and the insurance company, which must report a 2017 contribution on Form 5498 in May. If the replacement check was postmarked by 4/18 and if the insurance company uses the IRS approved postmark rules, then they should accept the replacement contribution and issue the 5498. The insurance company should be contacted about these issues ASAP, since once the contribution data is accessed by the tax reporting unit that issues the 5498 forms, the company probably closes it’s books for 2017 contributions at that time.