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CP2000 for a retirement distribution or rollover (1099-R)

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CP2000 for a retirement distribution or rollover (1099-R)

By Tax Letter Desk Updated November 4, 2026

Short answer

A rollover done within 60 days isn’t taxable, unless it goes to a Roth account. It must still be reported.

If your CP2000 treats a rollover as taxable, you can disagree and send your records.

A taxable amount you didn’t roll over belongs in income.

Checked November 4, 2026 against IRS Topic 413 (Oct 8, 2026) , IRS Topic 652 (Oct 16, 2026) .

In this article

When is a rollover not taxable?

What if I didn’t roll it over?

Which payouts can’t be rolled over?

How do I dispute a rollover counted as income?

What if the 1099-R itself is wrong?

Why was 20% withheld?

Questions

When is a rollover not taxable?

A rollover moves cash or assets from one eligible retirement plan to another within 60 days.

It isn’t taxable, unless it goes to a Roth IRA or designated Roth account from another type of plan.

It is still reportable on your federal tax return.

What if I didn’t roll it over?

Include the taxable amount you didn’t roll over in income for the year of the distribution.

Under age 59½? A 10% additional tax may apply, unless an exception does.

See which reply your notice needs before you pay anything.

Which payouts can’t be rolled over?

Required minimum distributions.

Hardship distributions from an employer plan.

Series of substantially equal periodic payments.

Corrective distributions of excess contributions.

How do I dispute a rollover counted as income?

Mark the disagree box and explain in a signed statement.

Name the line where you reported the rollover. Attach copies of your records, like the receiving account statement.

What if the 1099-R itself is wrong?

Topic 154 says to contact the payer if a 1099-R is incorrect.

Pub 5181: send a copy of the corrected form with your response.

Why was 20% withheld?

Eligible rollover distributions paid to you from an employer plan face mandatory withholding, generally 20%.

A direct rollover avoids it.

Sources

Topic no. 413, Rollovers from retirement plans IRS, updated October 8, 2026

Topic no. 154, Form W-2 and Form 1099-R (what to do if incorrect or not received) IRS, updated September 24, 2026

Topic no. 652, Notice of underreported income, CP2000 IRS, updated October 16, 2026

Publication 5181, Tax return reviews by mail (PDF) IRS, revision December 2022

Questions

60 days from the date you receive the distribution, with some exceptions.

Yes, when it comes from another type of plan.

Yes. It is reportable on your federal tax return.