[11924]
June 5, 2000
TO: PENSION MEMBERS No. 30-00
PENSION OPERATIONS ADVISORY COMMITTEE No. 39-00
RE: INTERNAL REVENUE SERVICE RELEASES ROTH RECHARACTERIZATION
REPORTING GUIDANCE
______________________________________________________________________________
The Internal Revenue Service recently released Notice 2000-30, which provides a new reporting
method to be used by IRA trustees, issuers and custodians for reporting IRA recharacterizations and
reconversions occurring after 2000, i.e., year 2001 transactions. The new method replaces the alternate
method of reporting permitted under Announcements 99-5 and 99-106. In addition, the Notice states
that it applies to recharacterizations and reconversions occurring after December 31, 2000 “whether or
not using the same trustee.”
1099-R Reporting
Notice 2000-30 requires that prior year recharacterizations and current year recharacterizations
be reported on separate Form 1099-Rs. Prior year characterizations will be coded with existing Code R
in Box 7, while same year recharacterizations will be coded with a new Code N in Box 7. Because prior
year and current year recharacterizations will be separately coded, they will be reported on separate Form
1099-Rs. However all prior year recharacterizations from the same First IRA must be reported together
on a single Form 1099-R, using Code R in Box 7. Similarly, all current year recharacterizations from the
same First IRA must be reported on a single Form 1099-R using the new Code N in box 7.
Form 5498 Reporting
Recharacterizations will be reported in a new box on Form 5498 titled “Recharacterized
contributions” (instead of in Box 2 as provided in Notice 98-49) and the checkbox entitled “Rechar.”
will be eliminated. All recharacterized contributions received by an IRA in the same year are permitted
to be totaled and reported on one Form 5498. Alternatively, each recharacterized contribution can be
reported on a separate Form 5498.
Reconversions are reported on Forms 1099-R and 5498 in the same manner as other
conversions. The alternate method described in Announcements 99-5 and 99-106 will not be available
for reconversions occurring in 2001 and thereafter.
The Service invites comments and suggestions concerning the new reporting requirements. A
copy of Notice 2000-30 is attached.
Kathryn A. Ricard
Associate Counsel
Attachment
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