IRA CD Banking Error

  |     |   113 posts since 2013

I have an IRA money market account with Bank of America. January 2013 I opened an IRA CD with Bank of America that earned a little more interest. BOA provided me with a withdrawal form from the money market account and checked off the funds were being rolled over into another BOA IRA account. I made the assumption that all was good until I received a 1099 INT this past week for the account. When I visited the branch they said this was a regular cd and not an IRA cd. Now I am probably going to have to pay a penalty for an early withdrawal from my retirement account. In hind sight I blame myself for not paying more attention and checking the details on the quarterly statement but I was under the impression BOA set this up as an IRA account as I requested and the form indicated. I was wondering if anyone else experienced this type of situation and if I have any recourse to get this corrected so I do not pay a penalty or is this going to be an expensive lesson to be more diligent.

  |     |   2,603 posts since 2011
FAR:  I would think your main hope to come out of this without a penalty is to get a copy of the form where BOA checked off the funds were being rolled over into another BOA IRA account.  I would get to the bank manager where the form was done and see if he can do something to send in a "corrected" form to IRS showing the other 1099 INT was in error.  When it comes to IRAs we have to scrutinize everything the banks do as they will make errors many times.  However, they should take the responsibility for this problem and work it out so you do not have to pay the penalty .  If their form indicated it was an IRA account, I think "they" should have to undo this problem for you. 
  |     |   2,898 posts since 2010
If you do not have a copy of the transaction BOA will have a copy of it. Banks have to keep copies either on film, micro fiche or some other form of documentation. 

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