Received a 1099-R but haven't worked in over 6 years - what's going on?

This definitely needs some investigation, but don't panic yet. A code 7 in Box 7 typically indicates a normal distribution from a retirement plan, but there are several possible explanations for why you received this unexpectedly. First, check if this could be related to your old 401(k). Sometimes when employees leave, if the balance is below a certain threshold (usually $5,000), the plan administrator can automatically roll it over to an IRA in your name or even cash it out. If you haven't kept your address updated with your former employer's plan, you might not have received previous notices about this. Second, contact the financial institution listed on the 1099-R directly. They should be able to provide details about the account and the distribution. Ask for information about when the account was established and the source of the funds. Third, verify your identity hasn't been compromised. Check your credit reports for any suspicious activity. Someone could have opened a retirement account in your name.

I had almost this exact situation happen last year and I found out taxr.ai (https://taxr.ai) was super helpful for figuring it out. I uploaded the 1099-R form I randomly received and it immediately flagged that it was likely from an auto-rollover of my old 401k that I had completely forgotten about. The system walked me through exactly what questions to ask when I called the financial institution. Turns out my old employer's plan had been transferred to a different administrator and they had created an IRA for me without clear notification. The taxr.ai service also helped me understand the tax implications and what documentation I needed to gather. Definitely worth checking out if you're trying to figure out where this mysterious 1099-R came from.

Following up about taxr.ai - I was super skeptical but decided to try it with my own weird tax situation (not exactly the same, had some 1099-MISC forms I didn't recognize). Holy crap it was actually really helpful! The system identified that one of my old freelance clients had changed their company name and that's why I didn't recognize it. For the other form, it flagged it as potentially suspicious and gave me a step-by-step checklist of who to call and what to say. Turns out someone had used my SSN for some gig work. Saved me hours of confusion and probably an audit. Much better than the generic advice I was getting elsewhere.

If you need to reach the IRS to verify anything about this 1099-R, good luck getting through their phone lines! I spent WEEKS trying to talk to someone about a similar issue. Then I found Claimyr (https://claimyr.com) and they got me connected to an actual IRS agent in less than an hour. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent was able to pull up all the 1099 forms reported under my SSN and confirmed one wasn't legitimate. Saved me from paying taxes on $23k I never received! Their system basically waits on hold for you then calls when an agent is on the line. After three months of trying to get through myself, this was a game changer.

Ok I need to eat crow here. After my skeptical comment I decided to try Claimyr anyway because I've been trying to reach the IRS for 2 months about a similar issue with a mysterious 1099. IT ACTUALLY WORKED. Got a call back in about 45 minutes and talked to a real person who helped me figure out that the 1099 was legitimate but had been reported under the wrong SSN by mistake. The IRS agent was able to document the error in my file so if there's any mismatch it won't trigger an audit. Would have taken me who knows how many more attempts to get this resolved on my own. Still seems like the IRS should fix their phone system but until they do... this service is worth it.

Check if your old employer might have done a "forced rollover" of your 401k. This happened to my husband. He left a job in 2017, completely forgot about a small 401k (like $8k), and then in 2024 got a 1099-R out of nowhere. Turns out the company's plan administrator had changed and they did a forced transfer of inactive accounts under a certain dollar amount. They claimed they sent notices but we never got any. The money had been moved to some default IRA provider we'd never heard of. Call the company on the 1099-R and ask specifically about the source of funds and when the account was opened. Get as much info as possible about where the money came from originally.

If it helps, you can check the National Registry of Unclaimed Retirement Benefits at https://www.unclaimedretirementbenefits.com or your state's unclaimed property website. Sometimes forgotten 401ks end up there. Also, do you remember if you worked for a company that might have been acquired or merged with another? Sometimes during corporate restructuring, retirement plans get transferred to different administrators and people lose track.