I believe the tax treaty with Italy says the pension is exempt from tax in Italy, but not exempt from US tax. I assume your client is a US citizen, and received a 1099R from his past employer in the US. Here is a link to the treaty.  chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.irs.gov/pub/irs-trty/italy.pdf