Is there anyway to find a FEIN for an Air Force retirement account.

[Donna1]

I have a new client this year and she is getting payments from her ex-husband's Air Force retirement account. The instructions for this say to report it the same way you would report a 1099-R pension, annuity, etc. on Line 4 (2018 form 1040). The organizer shows that the previous accountant did report it on line 16 (prior to 2018 form 1040) pension income. She does not get a 1099-R. This is my problem. I do not have the FEIN or address to complete the 1099-R worksheet. I cannot electronically file the return without this information. Is there someway to find this or do I need to file a paper copy of the tax return?

[IRonMaN · Accepted solution]

If they didn't get a 1099R, are you sure it is taxable rather than nontaxable disability payments?

[Donna1]

I am positive it is taxable. My first thought was, she shouldn't be reporting this on her tax return, but the previous preparer was reporting it so I did my research. A Tax Court Case in 2000 Baker v. Commissioner involved a military retiree that was ordered in a divorce decree to pay his ex-wife 50% of his military retired pay each month as part of the property division. Without going through the whole court case, The IRS ruled the ex-husband could reduce his income by the amount paid to the ex-wife and the ex-wife had to include it as income on her tax return.

My client's prior accountant put it on line 16b and had been doing so since she started receiving it. So I am trying to put it on line 16 but obviously need the FEIN and the address in order to electronically file the return.

[rbynaker]

I agree it's not completely impossible but in most of the cases I've seen once the taxpayer jumps through the hoops to get the QDRO recorded with the pension administrator, then everybody gets their own 1099-R and then nobody is begging the IRS for an audit by arbitrarily creating fake 1099 entries.  Also everybody gets their own withholding.

How's it work when he takes a $50K pension distribution, has $10K taxes withheld and puts $40K in the bank.  Does she get $25K in cash or only $20K?

[Donna1]

She told me that she gets a deposit automatically into her bank account each month and has never received a 1099-R. I have no idea how the ex-husband reports his share other than reporting the full amount on 16b and preparing a statement under the other income line entering a negative amount with the explanation regarding the pension being paid to the ex-spouse. I would assume he is providing the IRS with her SS number.

I am thinking that maybe I should report it as other income with the explanation that it is her share of the pension...

[rbynaker]

Direct deposit from DFAS?  That should come with a 1099R.  How long ago was the divorce?  I'm wondering if they just don't have her current address.  Can you pull a prior year transcript from IRS to see if anything shows up under her SSN?

Like I said, not completely impossible but I'd do a little more digging.