trying to get my 401k money

[dmriza]

I had a 401k account with $1,500 that I did not know about. The company holding the account (Harrison Trust) closed my account because it was too small and they mailed me a check about three years ago. Since I did not request that the account be closed and I was not aware that it was being closed I was not expecting this check. They mailed the check to my old mailing address so I never received it. The problem I am having is this....

The IRS sent me a letter saying that I did not pay taxes for this money that I withdrew from my 401k. I would like to konw am I required to pay the taxes in the tax year that they issued the check that I never received?

Is the holding company required to pay me interest for the three years that they had my money?

The company holding my 1,500 is aware that the check has not been cached but they have not issued me a replacement check. I have been trying to get a replacement check for three months. Are there any laws that require 401k companies to give you your moeny in a timely manner?

I am located in California.


Your help with this matter is greatly appreciated

[teflon_jones]

I had almost the exact same problem several years ago, but it took me over a year to get my check. Here's what you need to do to resolve this:
1. Determine what you want to do with this money. Do you want to move it into another account (a Roth IRA is probably your best bet), or cash it out?
2. Call them and request a rollover package. They will usually mail one to you, but you may be able to get if faxed or emailed to you.
3. Fill out the rollover paperwork and send it back to them certified return receipt. Include any information you have relating to the old check and tell them to stop payment on it and send you a new check. If you want to roll it over to another IRA, you'll need to determine who that will be first since the check will need to be made payable to them with you listed as "FBO" (For Benefit Of).

Normally if you decide to cash out a 401K account, the holder will take out the necessary taxes and send you only the remaining balance in the check. If not, you're responsible for reporting the amount of the check as regular income. Until you deposit the check, you're not responsible for paying any taxes. Lastly, no, they're most likely not responsible for paying you interest on the account. Normally the account goes into a holding pattern as of the day you terminated employment with that company.

[cbg]

Under the law, if after x amount of time (I have 90 days in mind but I'm not sure if that's statutory or my plan document) you have not provided your employer with instructions as to what to do with your 401k AND it is under $5000, they have the right to cash it out and send it to your last known address. You ARE required to pay taxes on this money, as well as a 10% penalty for early withdrawal.

This is only one of the reasons why it is important to keep your former employer advised of any changes of address.

BTW, this should have been posted under Fringe Benefits in the Employment Law section; it has nothing to do with banking or credit cards.