"He did not receive any forms from Merrill Lynch."

He will receive one, a Form 5498, but not until May, when he will call you and ask you what to do with it.  You will tell him to keep it handy in case IRS asks about the rollover.  

Some of these rollovers of an inherited IRA have to be done trustee-to-trustee, which at least eliminates the tax withholding.  Apparently there is an exception when the spouse is the beneficiary.  But he could have avoided paying tax on the withholding by doing it the easy way.  Now his return is going to look suspicious because of the high ratio of withholding to AGI.