Expert: Richard Stolp - 10/12/2011

Question
A few years ago, I transferred from one employer to another, and though both of them do have tax-exempt retirement accounts, it turns out that they are also two different types.  As a result, I had to write to the former employer to transfer the balance of the old fund to the new one.

However, as it turned out this, this turned out to involve a series of complicated steps, in which the former retirement fund writing out a check to me in my individual name.  What I was instructed to do was to give this check to my new retirement fund, where they would then deposit the entire number to my new account there.

I'm not sure if this is the standard operating procedure when a person changes employers, but this ended up being a headache around tax time, as my accountant had initially overlooked this fact, noticed that a "withdrawal" from the old account went out to my name, and I was taxed accordingly.  (The accountants later pointed out to me the error and told me that I should do something about it; what that would be, I don't know)

What are the steps I should take in order to correct this error and get my money back, before I allow myself to get taxed twice upon the day this money is inevitably withdrawn upon retirement?  I appreciate any help you can give.

However I did not keep a penny of this retirement money.  For some reason we had to do it this way in order to make the transfer.  How do I go about getting back money that I should not have

Answer
My suggestion would be to file an amended return for that year and include copies of all your account info from both accounts and a letter of explanation. As you probably now know the check should have been made out to the target account. Don't send the IRS any originals and call after two weeks or so and be sure they are working on your account 800-829-7650.