I've Forgotten Where I Put Some of My IRAs! How Can I Find Them?

Q: I’ve lost track of some of my IRAs. What should I do? I must take my first distribution next year. Over the years, I rolled several IRAs into different New York banks, and I’m not sure where they all are. I went to one of these banks and was told they only keep records for seven years. I know there's a penalty if I don't take the right IRA distribution. The Internal Revenue Service says they don't have a list of my IRAs. How can I find out where they might be?

Also, there's a small bank account that belonged to my deceased husband and the bank is no longer in business. How would I go about finding it?  -- MP via email

 

A: To lose one bank account may be called a misfortune. To lose several looks like carelessness! (Sorry, I couldn't resist that.) The likeliest explanation is that you have fewer IRAs than you thought. Perhaps you combined some of them.

But it's important to double-check.You're right that there's a steep penalty for not taking required IRA distributions: it's 50% of the amount you should have taken. If your required distribution is $2,000, for example, the penalty for failing to take it is $1,000.

Have you done a thorough search of your closets, drawers, shoe boxes, and any other place you may keep old account statements? An IRA owner gets regular statements from the account custodian -- i.e., the bank, mutual fund, insurer, or broker that holds the IRA.

At a minimum, you should receive an annual statement for each IRA. 

The IRA custodian sends the same account information to the IRS, says Ed Slott, a tax accountant and IRA expert: "The bank files Form 5498 with the IRS every year. That form shows your annual IRA contribution, and the fair market value of your account." 

That’s how the IRS is able to cross-check that you’re telling the truth about the IRA contributions you claim on your tax return, and how it makes sure you're taking required distributions after you're 70 and a half. 

**"Ask the IRS for a wage and income transcript," advises Barry C. Picker, also a tax accountant and IRA expert. "It should list the 5498 forms, which would tell you which banks are reporting IRA accounts to to the IRS." Even if the information about your IRA balances isn't up to date, the wage and income transcript will at least tell you where the accounts are. To obtain the transcript, file form 4506-T with the IRS. You can download it at www.irs.gov. [**This paragraph was added to the original post.]

If the IRS hasn't received reports about these missing IRAs, you don't have to worry about penalties for missing a distribution deadline. You won't be penalized for not taking distributions from IRAs that the IRS doesn't know about, Slott says.

As a final check, you should also call New York State's Office of Unclaimed Funds, at 800-221-9311.

Under the state's law of 'escheat', an account in which there's been no activity for 5 years is declared 'abandoned'. Banks advertise in newspapers for the owners of these 'abandoned' accounts to come forward. If no one does, the money goes to the state. (To search for abandoned accounts online, go to http://wwe1.osc.state.ny.us/ouf/oufSearchForm.html ). If you can prove an account is yours, you get it back; but you won't get retroactive interest on it.

You should search Unclaimed Funds for accounts under your late husband’s name as well as yours. You may find his missing bank account. Since his bank went out of business, it’s also a good idea to write a letter of inquiry to the FDIC. It’s the federal agency that handles bank failures.

Send two copies of the letter -- one to FDIC Consumer Response Center at 2345 Grand Boulevard, Suite 100, Kansas City MO, 64108-2638, and the other to FDIC Division of Resolutions and Receiverships, 1910 Pacific Avenue, Dallas TX, 75201.

Your letter should include the name of the bank, the name and number on the account, and a copy of most recent account statement you have.  

Good luck!

Please send your questions to [email protected]. I'm sorry I can't respond personally to every email. Questions are addressed only online.

(c) Lynn Brenner, All Rights Reserved.