Public Mediation

Coastal bank and trust-Dispute-#1329748

C. A. vs. Coastal Bank And Trust (Headquarters)
2414 N Marine Blvd, Jacksonville, North Carolina, 28546-6907, United States
Amount Involved: $931.63
Complaint(s): Bad business practices
    • Claimant Seeks: View.
    • Claim #: 1329748
    • Amount Involved: 931.63
    • Filed On: Jun 27, 2012
    • Posted On: Jul 08, 2012
    • Complaint(s):
      • Bad business practices
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Statement of Claim
Complaint Involved (1) - View
"They reported my IRA withdrawal in the wrong year, and to straighten it out and pay the IRS fees and fines it cost me $ 847.50 not including interest."
...
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Exhibits View
Additional Communication Between Claimant and Coastal Bank And Trust (Headquarters) Hide
  • Jul 03, 2012, Coastal Bank and Trust (Headquarters) (responding party) added:

  • Please see attached.

  • Jul 04, 2012, Claiming party added:

  • The salient point is that I withdrew funds from my I.R.A. in December of one calender year and deposited it in my checking account, but you reported the withdrawal to the I.R.S. as being withdrawn in the following calender year.

  • Jul 05, 2012, Coastal Bank and Trust (Headquarters) (responding party) added:

  • The depositor has failed to specify which tax year to which he is referring. Please provide the tax year this alleged incident took place.

  • Jul 06, 2012, Claiming party added:

  • As I recall the withdrawal was made on December 31, 2007, but was not posted by the bank until January 2, 2008.

What Claimant Wants Hide
1. Damages: Error on bank's part Jul 12, 2012 $847.50
2. Pay me interest $84.13
3. Other – Pay for claim posting cost Jul 12, 2012 $7.95
Cash total : $939.58
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Respondent's Counteroffer Hide
The claimant's settlement terms were rejected with the following explanation:
  • I disagree with the explanation / grounds provided

    "Mr. Anderson states that Coastal Bank and Trust wrongly and negligently reported an IRA distribution for tax year 2007 in 2008.

    Unlike IRA contributions, IRA required minimum distributions are required to be taken by December 31 of each year. While special provision is made for required minimum distributions in the year the taxpayer turns 70-1/2, there is no provision in the law which permits backdating a required minimum distribution to a previous tax year after the taxpayer turns 70-1/2. Therefore, since Mr. Anderson turned 70-1/2 in 2000, this provision does not apply. Mr. Anderson’s transaction took place on January 8, 2008 and was correctly reported to the IRS for tax year 2008.

    IRS publication 590, which outlines the law pertaining to Individual Retirement Agreements states: “The required minimum distribution for any year after the year you turn 70-1/2 must be made by December 31 of that later year.” [page 22]

    And in the following Example on that page: “You reach age 70-1/2 on August 20, 2011. For 2011, you must receive the required minimum distribution by April 1, 2012. You must receive the required minimum distribution for 2012 by December 31, 2012. If you do not receive your required minimum distribution for 2011 until 2012 distributions will be included in income on your 2012 return.”

    Since Mr. Anderson turned 70-1/2 in 2000, and since the provision allowing applying required minimum distributions to a previous tax year only applies to the year following that in which the taxpayer turns 70-1/2, it does not apply to this situation. Mr. Anderson was required to take his distribution for 2007 prior to December 31, 2007. Mr. Anderson performed the transaction on January 8, 2008, and the transaction was correctly reported for tax year 2008.

    Any penalties or interest assessed to Mr. Anderson because of his failure to take his required minimum distribution timely and in compliance with the law are not the responsibility of Coastal Bank and Trust.
    "

This claim will remain posted until resolved.

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