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Economics Summaries
Evil Banks

Wells Fargo Inherited IRA Nightmare
Inherited IRA Horror
Clueless Employees Wreaking Havoc
by Vaughn Aubuchon

Here is a page describing the total and utter incompetence of Wachovia Bank, which is now owned by Wells Fargo. If you are transferring an Inherited IRA account away from Wells Fargo, be VERY CAREFUL. Wachovia was incompetent, and by association, their parent as well. Wells Fargo simply rubber-stamps the previous errors of Wachovia employees.

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Chronological History

1. Wachovia Bank Inherited IRA Transferor Failure

2. Union Bank Inherited IRA Transferee Failure
--- Copy of Cashier's Check
3. IRA Disaster Timeline

4. The Bottom Line ------ 5. Conclusion

6.
Graphic of My Wells Fargo IRA Disaster

7.
Graphic of my letter to Wells Fargo

8. Wells Fargo's Legal Department's Response

9. Wells Fargo's Response with My Annotation

10. 2014 UPDATE from Union Bank

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Addenda

11. Seeking A Private Letter Ruling

12.
IRS Law

13.
Fiduciary Accountability

14. Filing A Complaint with the Federal Reserve

15.
Inherited IRA Info on Each Bank's Website

For an exhaustive expert discussion of this case, please visit
Ed Slott's Excellent IRA Help Website

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1. Wachovia Bank (the failed transferor)

Ever since my World Savings account got consumed by Wachovia, there have been issues, such as the RMD. Each conversation resulted in a telephone call to headquarters by my 22-year-old account representative, one Adam W. The answers provided were nebulous, vague, inconclusive. Because of this, and because of the ubiquitous negative buzz on Wells Fargo, I decided to transfer my Inherited IRA to locally-owned Union Bank of Capitola, CA, on April 13, 2010.

The new Wachovia bank IRA guy (Rob G.) told me I could transfer my account to my Union bank with NO PENALTY - all I had to do was complete the transfer in a single day. Since Wachovia's computers were "down", he suggested that I hand-carry a Cashier's check over to Union Bank right away, that day. I did precisely that, on April 13, 2010.

It is hard to believe that a "Financial Specialist", whose job is to administer IRA transactions, can be totally unaware of just what an "Inherited IRA" is, and the special rules associated with it.
- - - - - - -
In a 13-minute phone call on Feb. 25, 2011, Wells Fargo employee Rob G. essentially washed his hands of the situation, because I was "scaring him", and told me that I must deal with their corporate IRA Department exclusively, by calling 1-800-WACHOVIA. When Wells Fargo screws you, you are not allowed to get upset, apparently. "Hand washing" doesn't cut it for me - if an officer of the bank, who was responsible for this transaction, is unable to contact the proper corporate personnel, how can I be expected to contact (find) them?

So Rob thinks that I am going to subject myself to phone tree Hell? Not likely. I have a bad heart (permanent atrial fibrillation, CHF, RIS). Fuming on a phone line with make me apoplectic, and I might have a heart attack, or lose my mind.

ROB is the one that screwed up. HE knows far better than I whom to contact. I hold HIM SOLELY responsible for contacting the Wells Fargo brass, who can fix this transaction error.


He also informed me that any such transfers MUST BE INITIATED by the receiving bank. He did NOT TELL ME THIS on April 13, 2010, because he was obviously unaware of it at that time. During this conversation, Rob G. threatened me with a defamation action. Rob was not aware that TRUTH is an absolute defense to "defamation."

On Jan. 25, 2011, I received a 1099-R from Wells Fargo, which listed the ENTIRE AMOUNT of my Inherited IRA as a "Gross Distribution" in box 1. THIS IS BULLSPIT! According to the 1099, I must pay AN EXTRA $29,000 in tax on April 15, 2011. No matter what, THAT is NOT going to fly, without Superior Court action on my part.

Attn.: IRS
My RMD (Required Minimum Distribution)
In 2008, I took my RMD (Required Minimum Distribution).
In 2009, the RMD was waived for everyone.
In 2010, I was denied ANY distribution by Union Bank. - How can I be penalized for not taking an RMD, when I was NOT ALLOWED TO?

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2. Union Bank (the failed transferee)

On 12-20-10 (8 months after the funds transfer), I went into Union Bank, and I asked Employee B (K.F.) what my RMD would be for the year. She said, "Huh"? "You have an individual IRA." Because the check issued by Wachovia DID NOT SPECIFY "Inherited IRA" and "BENE of ROBERT Sxxxxxxx", it was NOT transferred properly as an Inherited IRA.

When I transferred the money to Union Bank, I clearly specified the necessity of maintaining an "Inherited IRA" status. "This is the way we do it", I was told by Employee A (Esther St. Ores). Apparently, I was incorrectly informed. I now realize that there was NO PROVISION WHATSOEVER for an Inherited IRA, on the form that the IRA administrator used. The lady who helped me, Employee A, had no concept of what was going on, or what I was trying to do. Every question I asked was met with "pooh-poohed" responses. I was uncomfortable about it at the time, but the reassurances given were very strong.

At Union Bank, new Employee B (K.F.) NOW informs me that the ONLY WAY to transfer an Inherited IRA is through a direct "trustee-to-trustee" transfer (interpretation - no checks may be used - apparently, Wachovia did NOT know this). In addition, Union Bank Employee B informed me that I will receive a 1099-R form in January (she was correct), specifying my ENTIRE Inherited IRA as "Ordinary Income" for 2010, AND that I will be required to pay income tax on the full amount.

Employee B REFUSED to let me take a distribution in December. There was NO REASON to bar me from taking a discretionary distribution, whether it be an RMD, or not.

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Wachovia Cashier's Check


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3. IRA Disaster Timeline

Date

Doc. #

.
Occurrence

Bank

Sept. 6, 2007

1

Established my identity

WS

Sept. 14, 2007

2

Provided my birth certificate

WS

Sept. 24, 2007

3

Provided mother's death certificate

WS

Sept. 27, 2007

4

Request for Surviving Child Certification

WS

Oct. 3, 2007

5

Surviving Child Certification

WS

6

Inherited IRA Distribution Request

WS

7

Inherited IRA New Account Form

WS

World Savings was bought by Wachovia.

Jan. 28, 2008

8

1099-R - Adam Weiss

WS

9

Form 5498

WS

Jan. 14, 2009

10-11

Retirement Account Statement for 2008

Wach.

Jan. 21, 2009

12

1099-R - BENE OF ROBERT STEPHENS

Wach.

Mar. 9, 2009

13

RMD Waiver for 2009

Wach.

Apr. 3, 2009

14

1099-R - BENE OF ROBERT STEPHENS

Wach.

Jan. 19, 2010

15-16

Retirement Statement - BENE OF ROBERT STEPHENS

Wach.

17

Form 5498 (1-08-2010)

Wach.

April 13, 2010

Performed erroneous transfer, based upon bad advice from Bank Officer Rob G. at Wachovia Bank, 1830 41st Avenue, Capitola, CA 95010
who is now with Wells Fargo Bank, 1700 41st Avenue, Capitola, CA 95010

Wach.

18

Retirement Account Withdrawal Confirmation

Wach.

19

Wachovia Cashier's Check

Wach.

-

I went straight to Union Bank.

UB

20-25

IRA Application and Adoption Agreement

UB

Apr. 20, 2010

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Wachovia Became Wells Fargo

Wells

Apr. 24, 2010

26

Time Deposit Receipt

Wach.

Aug. 22, 2010

27

Statement of Accounts - IRA

UB

Nov. 29, 2010

28

No annual fee

UB

Dec. 20, 2010

29

Kaitlyn F. Notes (Union Bank)
Became aware of failed transfer, when advised by Union Bank that my IRA account was not "Inherited"

UB

30

Sent email 7:00PM - to Kaitlyn

UB

-

Retained attorney D.S. to address the issue

atty

Dec. 22, 2010

31

Sent email 1:23PM - to Don. S.

atty

32-33

Sent email 3:30PM - to Don. S. - forwarded Kaitlyn email

atty

34

Sent email 4:27PM - to Kaitlyn

UB

35

Sent email 4:57PM - to Kaitlyn

UB

100

40

350 - 540

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3. IRA Disaster Timeline (con't.)

Date

Doc. #

.
Occurrence

Bank

Jan. 18, 2011

36-37

Retirement Statement - INCORRECT

Wach.

Jan. 21, 2011

38

Received a 1099-R from Wells Fargo Bank, N.A., 2801 Market Street, St., Louis, MO 63103
which said that I had a "GROSS DISTRIBUTION" of the entire amount of my Inherited IRA

Wells

Jan. 31, 2011

39

Statement of Accounts - IRA - WRONG

UB

Feb. 20, 2011

-

Retrieved my documents - attorney did nothing at all, except deprive me of my documents.

-

Feb. 21, 2011

40

Sent a registered letter to Rob G. at Wells Fargo Bank, 1700 41st Avenue, Capitola, CA 95010
I requested that a corrected 1099-R be issued to me.
This has still not been done, as of April 3, 2011 Feb. 2014

Wells

Feb. 25, 2011

41

Received email 11:41AM - from Rob G. - requested my account number

Wells

42

Answered email 3:43PM - to Rob. - provided my account #

Wells

Feb. 25, 2011

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Received 13-minute telephone call from Rob G. at Wells Fargo - it did not go well.
Rob G. was very concerned that he would be subject to "defamation" by me.

Wells

Feb. 26, 2011

43

Sent email 12:28AM - to Ro. - supplied copy of requested 1099

Wells

44

Received email 9:48AM - from Rob G. - SS# did not match - "What was my stepfather's physical address?"

Wells

45

Sent email 11:04AM - to Rob - supplied step-father's correct SS# - Provided my stepfather's physical address and SS#.

Wells

Feb. 27, 2011

46

Answered email 5:55AM - to Rob. - Provided name, address, death date, mother's maiden name

Wells

47-48

Sent email 6:14AM - to Ro. - supplied copy of requested 1099

Wells

Feb. 28, 2011

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Answered email 8:58AM - to Rob. - provided copy of 1099-R sent to me by Wells Fargo (Rob G. could not find records)

Wells

Mar. 1, 2011

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Received Email from Rob- directed Rob G. to this web page - supplied

Wells

50

Received email 8:43AM from Rob- "We have an escalation team working on your transaction as we speak." "Can you verify the date that you had an Inherited IRA account opened at Union Bank, prior to requesting the transfer from Wachovia?"

Wells

Mar. 2, 2011

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Sent email 2:29PM - I told Rob G. that I had opened the account on the same day as the transfer - April 13, 2011, just as he had instructed me.

Wells

Mar. 12, 2011

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I guess the 'Escalation Team" is hard at work, 10 days later, since they have yet to contact me.

Wells

Mar. 15, 2011

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"Our IRA escalation team is still working toward a resolution for you on this matter. I should have some more news for you by the weeks end." ... Rob G.

Wells

Mar. 29, 2011

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"Weeks end" would have been Mar. 18, 2011.
It is now 2 weeks after "weeks end". I have heard nothing.
Therefore, it is time for me to "escalate" this case, since it is apparent that Wells Fargo intends to do nothing.
I have waited long enough. I created THIS page.

Wells

April 18, 2011

53

Received a letter (transcribed below) dated April 5, 2011 from the Wells Fargo Legal Department, located here -
Law Department
MAC N9305-172
1700 Wells Fargo Center
Sixth and Marquette Avenue
Minneapolis, MN  55479

THE LETTER IS NOTHING BUT DENIAL, LIES AND STONEWALLING.
ALL THE ACCUSATIONS AGAINST WELLS FARGO ARE TRUE.
THEY ARE CRIMINALLY NEGLIGENT, AND MUST BE REGULATED.

Wells

53.2

Sent letter to IRS -
"On April 13, 2010, Wachovia incorrectly transferred my Inherited IRA Account to Union Bank at 601 Bay Avenue in Capitola. This transaction was not conducted properly."

IRS

May 24, 2011

53.4

Received Letter from IRS -
"We haven't resolved this matter because we haven't completed all the research necessary for a complete response. We will contact you again within 45 days to let you know what action we are taking. You don't need to do anything further now on this matter." (the text was bolded by me.)

IRS

June 23, 2011

53.6

Received Letter from CA FTB -
"Please accept our apologies for the delay in replying.
In regards to the Inherited IRA Account Transfer issue, you should request the bank to reissue a corrected 1099-R form as soon as possible under the correct account name as you have mentioned in your correspondence."
I DID, BUT THEY WOULD NOT.

FTB

June 29, 2011

53.8

Received Letter from IRS -
"Thank you for your correspondence received April 20, 2011.
If you are unable to resolve your concerns with the financial institution(s) involved within your correspondence and you wish to continue with the Private Letter Ruling, please refer to the Internal Revenue Service website, IRS.gov. There are specific instructions within IRS procedures, Subcategory: Code, Revenue Procedures, Regulations, Letter Ruling.

IRS

Dec. 4, 2012

54

Letter from Union Bank - "No Annual Fee"

UB

Jul. 25, 2013

55

Union Bank - Statement of Accounts
- no mention of "Inherited"

UB

Jan. 16, 2014

56

Union Bank - "Annual Required Disbursement"
- NOT characterized as "Inherited"
- so, why is the distribution "Required"?

UB

Feb. 10, 2014

57

Statement of Accounts for IRA - $66,96x.xx through Dec. 31, 2013.

UB

Mar. 7, 2014

58

I engaged a respected local tax CPA in Capitola.
She agreed to look into the matter, and see what she could do. Her initial finding was quite positive in my favor (details confidential for now). She has experience with this type of problem.

CPA

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4. The Bottom Line

NEITHER BANK'S "CORPORATE DEPARTMENT" EXHIBITED ANY INCLINATION TO TALK TO ME. THEY BOTH SLAMMED SHUT LIKE A CLAM.
The bottom line is simply this - the people at banks responsible for your large IRA deposits, are ill-equipped to perform transfers, because they have NO IDEA what they are doing. Their lack of knowledge can cost you many thousands of dollars with the IRS.

Here is my Wachovia IRA Withdrawal Confirmation. I had strong reservations at the time, but I was assured that all was well.

Apparently, Union Bank does not even have a proper form.
Here is my
Union Bank IRS transfer form, which clearly makes NO PROVISION for an Inherited IRA. There is but ONE MENTION, on page 3, section 3, as if it were an afterthought. I filled in my beneficiaries there, where it says "Inherited IRA." That appeared to be correct, since that is what it said. And therefore, I swallowed the bill-of-goods thrust upon me, due to the insistence of the administrator. Big mistake. The Union Bank form is a joke.

Four examples of PROPER Inherited IRA Transfer Forms -
Proper
Inherited IRA transfer form - from Nicholas Funds.
Proper
Inherited IRA transfer form - from Yachtman Funds.
Proper
Inherited IRA transfer form - from State Farm.
Proper
Inherited IRA transfer form - from Sunwest Trust.
Please note that ALL 4 examples above DO have a PROVISION for an Inherited IRA. Union Bank does NOT.

In addition, the downloadable PDF document
from Union Bank, found at -
https://www.unionbank.com/Images/transfer_account_investments3_tcm9-2024.pdf
entitled - "Transfer of Assets Instructions", makes NO PROVISION WHATSOEVER for the transfer of an "Inherited IRA" account, and only uses the word "inherited" once at the bottom, as an afterthought. This form is actually from "National Financial Services", and "Union Bank" occurs NOWHERE on the form. UNION BANK HAS NO CLUE.

MANY IRA custodians have NO CLUE. I believe that the IRS should create a form that MUST be used to transfer Inherited IRAs. Such a form would prevent the many fiascoes that are created due to the lack of such a form. Right now, it is "the wild west", with incompetent trustees botching transfers helter-skelter. THIS NEEDS TO STOP. People rely upon their retirement accounts, and the IRS needs to provide the means for glitchless transfers.

You screw me, I fight back. I know BS when I see it.
The fact that I must spend hours and hours on this fiasco, fills me with rage. One must fight back with all resources available, in order to correct incompetence, avoid gross negligence, protect your money, and secure fiduciary accountability.

It is MY MONEY we are talking about here!!!

510 - 530

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5. Conclusion

Due to the incompetence, errors and arrogance of Wachovia Bank, I will be required to pay taxes on my funds TWICE. Once, for the "Gross Distribution" from Wachovia, and then again, when I withdraw the SAME funds from Union Bank, where the account is incorrectly labeled an "IRA Rollover" account. This is NOT acceptable.

At this point, I can see no alternative, other than to file suit in Superior Court against Wells Fargo Bank, because -

-- 1. They failed to perform the Inherited IRA transfer transaction properly
-- 2. They failed to maintain the Inherited IRA Account in the name of my stepfather
-- 3. They refuse to remedy the situation, or even discuss it
-- 4. I will have to pay taxes on an "ordinary distribution" from Wachovia
-- 5. I will have to pay taxes AGAIN, when I withdraw the SAME funds from Union Bank.

How can a lay customer be expected to know the requirements of these trustee-to-trustee transfers, when in fact, the trained Financial Specialist at Wachovia had no such knowledge? It is apparent that the Financial Specialist at Wachovia had NO IDEA what an Inherited IRA is, and the special requirements involved. Call it negligence or incompetence. Take your pick.

It is also glaringly apparent, that Employee A (Ester S.) at Union Bank had NO IDEA what an Inherited IRA is, and the special requirements associated with it. She mindlessly rejected all of my voiced concerns out-of-hand, because she was so focused on just getting my money. She kept insisting , over and over, "This is the way we do it".

The IRS Tax Code is so bloated, so complex, that very few individuals know the answers to questions that are generated by the complexity. Foremost among the uninformed, are many bank employees. Unfortunately, these ILL-INFORMED, incompetent bank employees can cost you thousands of dollars, due to a lack of basic transaction knowledge. Your only recourse may be legal action. The IRS forbids the bank from giving you any investment advice, but that does NOT extend to conducting transfers of funds - the banks are EXPECTED TO KNOW HOW TO PERFORM BASIC TRANSACTIONS - transfers and rollovers. In my case, BOTH BANKS were utterly clueless, and need to be corrected, and sued for damages.

Inherited IRA Must Be Moved Very, Very Carefully
"If the original IRA custodian insists on giving the beneficiary a check for the IRA proceeds, the check should be made out to the new IRA custodian," says Slott. "Instead of being made out to Joe Smith, for example, the check should be made out to the XYZ Bank Inherited IRA for the benefit of Joe Smith. That way, Joe can't cash it; it must be deposited. That qualifies as a trustee-to-trustee transfer."
  -- Lynn Brenner's Family Finance

Financial Specialist Rob G. at Wachovia made the Cashier's Check out to ME, NOT Union Bank. This represents prima facie evidence that he was CLEARLY UNAWARE of this requirement. I experienced substantial financial harm, due to his obvious lack of knowledge.

Should a customer suffer financial loss, because Wachovia Bank's Financial Specialist did NOT know what he was doing? I say no.

Should a customer suffer financial loss, because Union Bank's Financial Specialist did NOT know what she was doing? I say no.

NEITHER BANKS' OFFICERS RAISED ANY ISSUES ABOUT THE TRANSFER, BECAUSE THEY WERE BOTH UTTERLY CLUELESS. NEITHER OFFICER TOLD ME THAT I WAS DOING ANYTHING INCORRECTLY. BOTH COMPLETELY FAILED THEIR FIDUCIARY RESPONSIBILITIES TO ME. THIS CONSTITUTES ACTIONABLE MISFEASANCE.

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6. Wells Fargo IRA Transfer Failure - A GIF Graphic

Wells Fargo IRA Transfer Failure

Should a bank customer suffer financial loss, due to the incompetence of bank employees?
I say no. We will see how a jury feels about it.
Those ponies are running roughshod over the rights of stagecoach customers,
trampling them into the dirt.

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7. My Letter to Wells Fargo

As a GIF

As Text ( for search engine benefit) -

To:
cc:
Subject:

Wells Fargo Bank
1700 41st Avenue
Capitola, CA 95010


Rob Gxxxxxxxx, Wells Fargo - 831-462-1832
Kaitlyn Fxxxxxxx, Union Bank - 831-464-6622
Inherited IRA Account Transfer Issues

Union Bank
601 Bay Ave.
Capitola, CA 95010


February 22, 2011


Dear Mt. Gxxxxxxxx,

On April 3, 2010, while at Wachovia, you assisted me in transferring my inherited IRA Account to Union Bank at 601 Bay Avenue in Capitola. This transaction was not conducted properly.

Because your "computers were down", you had me hand-carry a check over to Union Bank in Capitola, but you did NOT maintain my inherited IRA "in the name of the deceased IRA owner, as required by law. My inherited IRA account with you specified "BENE OF ROBERT STEPHENS". The transfer Cashier's check did not.

Consequently, this has caused me 2 large problems -
1. Wachovia treated the transaction as a "Normal Distribution", which is certainly not what I intended. This has resulted in Wachovia issuing me a 1099-R for ordinary income in 2010. This is unacceptable.

I need Wachovia to reissue a CORRECTED 1099-R as soon as possible.
I need Wachovia to inform Union Bank ASAP that my account is for the "BENE OF ROBERT STEPHENS".

2. Union Bank did NOT set up the account "in the name of the deceased IRA owner", because Wachovia didn't tell them. I will be required to pay taxes TWICE, on the SAME FUNDS, upon my second withdrawal from Union Bank. This is also unacceptable. I am an Internet publisher. You may want to consider that, as well. I am preparing a web page on this matter, as we speak. If this matter goes south, the page will be published, with all the details, and will never be removed.

I have gathered and chronologically arranged every single IRA document that I have ever received, and arranged them in a 3-ring binder. I can provide a copy of any document to help rectify the situation.

If you do not fix this error, I will have no other recourse than to file suit in Santa Cruz Superior Court. It will be cheaper to pay my attorney, than it will be to PAY the taxes TWICE.

We can easily avoid this pending double-litigation, by simply fixing the paperwork ASAP. I possess every single document conceivably required to support my position with the IRS

Thank you very much for your help in this matter.

Sincerely,


Vaughn Aubuchon - 831-464-xxxx - vaughn@vaughns-1-pagers.com

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8. Wells Fargo's Response


Wells Fargo Law Department Response

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9. Wells Fargo's Response Transcribed -
     with Annotation showing Stonewalling and Lies

 

(Wells Fargo logo)

Law Department
MAC N9305-172
1700 Wells Fargo Center
Sixth and Marquette Avenue
Minneapolis, MN  55479

April 5, 2011

Vaughn Aubuchon
P.O. Box 172
Soquel, CA  95073

Dear Mr. Vaughn,

"Dear Mr. Vaughn"? So, if I were George Washington, your salutation would be "Dear Mr. George"? Holy Moses. If a company is incapable of even getting a salutation correct, how the heck can they be expected to get ANYTHING ELSE correct? They can't, and don't.

I am Senior Counsel with Wells Fargo & Company, the parent of Wells Fargo, N.A., formerly Wachovia Bank, N.A.  This matter was escalated to me for review.  I have reviewed the transaction performed against the bank records on file.  The file indicates that your transaction was performed and documented as you requested at the time.

"... was performed and documented as you requested at the time." This is a bald-faced LIE! I requested an Inherited IRA Account Transfer!

Wells Fargo bankers do not hold themselves out as tax advisors and do not advise customers on how to structure their monetary transactions to achieve the tax consequences they want.  Your banker indicates that he cannot remember the transaction but would not have given you any such advice.

LIARS! I requested NO ADVICE whatsoever! I requested an Inherited IRA transfer, period.
The Wachovia employee HAD NO IDEA how to make a proper transfer.
"... but would not have given you any such advice." LIARS! AFTER CONSULTING WITH "HEADQUARTERS", he instructed me that a hand-transfer was acceptable, and ISSUED ME a Cashier's Check to effect such a transfer.

You mentioned in your letter that Wachovia treated the transaction as a :"Normal Distribution".  Although the Retirement Account Withdrawal Confirmation indicated that the Withdrawal Type was Normal, it was correctly reported as a death distribution on the 2010 Form 1099-R with a Code 4 in Box 7.  As a result, we are unable to "correct" the form 1099-R which correctly reported the distributiom.

"... the Retirement Account Withdrawal Confirmation indicated that the Withdrawal Type was Normal ..."
It was NOT a distribution OF ANY KIND. It was a transfer, which your employeee was incapable of handling correctly. He had NO IDEA what he was doing.

With respect to your concern about paying taxes twice, you may wish to consult with a tax advisor about the possibility of taking a distribution of an excess contribution or to determine alternative options under the circumstances.

To paraphrase, "Go take a hike - we did nothing wrong."
Wells Fargo is staffed by incompetent, disingenuous, lying b@stards, from top to bottom.

Sincerely,

WELLS FARGO & COMPANY

(signature)

Catherine A. Rudnick
Senior Counsel


By sending me this letter, Wells Fargo legal has CONFIRMED that they did not honor my request (due to incompetence). Their "bank records on file" DOCUMENT their failure to implement my request. IF I HAD INTENDED A DISTRIBUTION, I WOULD NOT HAVE FOLLOWED THEIR TRANSFER INSTRUCTIONS TO THE LETTER.

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10. 2014 Union Bank - Still Bungling My Account
I reeceived the notice below from Union Bank on Jan. 21, 2014

This Is A Highly Flawed Document

1. Tacit Admission of Complicity
Union Bank continues to list my IRA account as a REGULAR IRA, as shown above. BULLSPIT! If that is what they think it is, then WHY are they insisting upon an "Annual Required Disbursement"? They can't have it both ways. Under "Plan Description", it should say "Inherited IRA". Which they know damned well. Yet, they are seeking to hide their culpability in this fiasco by mischaracterizing my account.

2. "Every January" - That's a lie. They have NEVER done it!
"As part of helping you manage your Union Bank Retirement Plan, each January we calculate the annual disbursement amount you should receive from your retirement plan". BULLSPIT. In 2011, 2012 and 2013, they did NO SUCH THING. What they are now trying to do, in 2014, is re-characterize my plan as an "Inherited IRA" in a STEALTH manner, to save their bank from liability.

3. "Plan Description"
This is NOT a description - it is a NON-description to obscure the facts.
A description would be "Inherited IRA", "Roth IRA", "SEP IRA", "Simple IRA, or "Traditional IRA".
This is comparable to "automobile type" = car. Gimme a break.

4. "You elected to receive your distribution ..." -
I NEVER did that.
"In the past, you elected to receive your distribution from your Union Bank retirement plan". BULLSPIT. I did NO SUCH THING, because they would NOT LET ME do so, because they said that they had my account on their books as a "Regular IRA" for 4 years, as they have shown above (trying to have it both ways).

5. Signature = NONE!
Apparently, No employee of Union Bank wants to sign this piece of gibberish. Not only is there NO SIGNATURE, there is NO NAME. No one from the "Retirement Center" wants to be associated with this bag of lies. Understandably so.

6. Read ALL the Details Online
This page is accessible through Google. Search for - inherited ira nightmare, and this page will show up in the results in the #1 position. For a while, anyway.

7. IRS Penalties
WHO is going to pay for my penalties from the IRS? Union Bank is, in the Superior Court of Santa Cruz. Unfortunately, I have to wait to sue, until I suffer the ACTUAL monetary damages, even though there is no question that this will occur.


ADDENDA

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11. Seeking a Private Letter Ruling

IRS Bulletin 2011-1
Appendix A - Schedule of User Fees
Appendix B - Sample Format For A Letter Ruling Request
Appendix C - Checklist - Is Your Letter Ruling Request Complete?

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12. Applicable IRS Law - Inherited IRAs

IRS Publication 17

Page 124 (126)
Inherited from someone other than spouse.
If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. This means that you cannot make any contributions to the IRA. It also means
you cannot roll over any amounts into or out of the inherited IRA. However, you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary.
For more information, see the discussion of
inherited IRAs under Rollover From One IRA
Into Another,
later.

This was precisely my intent.
The employees of BOTH BANKS were unable to conduct this transaction properly, and maintain the account in the name of my stepfather.

IRS Publication 590

Page 18 (18)
Inherited from someone other than spouse. If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. This means that you cannot make any contributions to the IRA. It also means you cannot roll over any amounts into or out of the inherited IRA. However, you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as
beneficiary.

Like the original owner, you generally will not owe tax on the assets in the IRA until you receive distributions from it.
You must begin receiving distributions from the IRA under the rules for distributions that apply to beneficiaries.

IRS Publication 1099/ 5498 Instructions

Page 15 (15)
Inherited IRAs.
In the year an IRA participant dies, you, as an IRA trustee or issuer, generally must file a Form 5498 and furnish an annual statement for the decedent and a Form 5498 and an annual statement for each nonspouse beneficiary. An IRA holder must be able to identify the
source of each IRA he or she holds for purposes of figuring the taxation of a distribution from an IRA, including exclusion from current year gross income as an eligible rollover distribution under section 402(c). Thus,
the decedent's name must be shown on the beneficiary's Form 5498 and annual statement. For example, you may enter "Brian Willow as beneficiary of Joan Maple" or something similar that signifies that the IRA was once owned by Joan Maple. You may abbreviate the word "beneficiary" as, for example, "bene."

For a spouse beneficiary, unless the spouse makes the IRA his or her own, treat the spouse as a nonspouse beneficiary for reporting purposes. If the spouse makes the IRA his or her own, do not report the beneficiary designation on Form 5498 and the annual statement.
An IRA set up to receive a direct
rollover for a nonspouse designated beneficiary is treated as an inherited IRA.
(NOTE - IN SPITE OF THE FACT THAT THE IRS SAYS THAT "YOU CANNOT ROLLOVER ANY AMOUNTS", IN BOTH PUBLICATION 17, AND PUBLICATION 590, THEY USE THE TERM "ROLLOVER" HERE - even the IRS cannot get it right! How are we supposed to get it right?)

Page 16 (16)
Corrected Form 5498.
If you file a Form 5498 with the IRS and later discover that there is an error on it, you must correct it as soon as possible. See
part H in the 2010
General Instructions for Certain Information
Returns or Pub. 1220, if filing electronically. For example, if you reported contributions as rollover contributions in box 2, and you later discover that part of the contribution was not eligible to be rolled over and was, therefore, a regular contribution that should have been reported in box 1 (even if the amount exceeds the regular contribution limit), you must file a corrected Form 5498.

Statements to participants. If you are required to file Form 5498, you must provide a statement to the participant.

By January 31, 2011, you must provide participants with a statement of the December 31, 2010, value of the
participant's account and RMD, if applicable.
Trustees of SIMPLE IRAs also must provide a statement of the account activity by January 31. Contribution information for all other types of IRAs must be provided by May 31, 2011. You are not required to provide information to the IRS or to participants as to whether a contribution is deductible or nondeductible. In addition, the participant is not required to tell you whether a contribution is deductible or nondeductible.

If you furnished a statement of the FMV of the account, and RMD if applicable, to the participant by January 31, 2011, and no reportable contributions, including rollovers, recharacterizations, or Roth IRA conversions, were made for 2010, you need not furnish another statement (or Form 5498) to the participant to report zero contributions.

However, you must file Form 5498 with the IRS by May 31, 2011, to report the December 31, 2010, FMV of the account. This rule also applies to beneficiary accounts under the inherited IRA rules on page 15.

For more information about the requirement to furnish statements to participants, see part M in the 2010 General Instructions for Certain Information Returns.

General Instructions for Certain Information Returns
Section H. Corrected Returns on Paper Forms

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13. Fiduciary Accountability

Why should I, as a customer, be required to know more about transferring funds, than the Financial Specialist at the custodial trustee bank? I should not. I believe that this is blatant incompetence. The callous disregard of due diligence by Wells Fargo is mind boggling. They don't care if their employees act improperly, or not.
They leave me no other alternative than to file suit.

Adding to this situation, is the fact that banks are hiring young, inexperienced, and very uninformed employees. They do this, so that they do not have to pay high salaries. Unfortunately, this results in many botched, actionable transactions for customers.

All the results of this case will be reported on this page. Wells Fargo needs a lot of illuminating sunshine, so that others may be forewarned. I will provide as much bright sunshine as I possibly can, over the coming months.

Matters for Court Adjudication

1. Should a bank employee be allowed to make errors that cost customers 1,000s of dollars, and not be held accountable?
NO, but Wells Fargo employees are. This must be changed.

2. Should a
bank be allowed to ignore erroneous transactions, which cost customers 1,000s of dollars?
NO, but Wells Fargo does.

3. Should a
bank be allowed to hire young kids with NO FINANCIAL TRANSACTION TRAINING, call them "FINANCIAL SPECIALISTS", and allow them to wreak havoc with customer's accounts?
NO. Absolutely not. But Wells Fargo does this.

4. Should a bank be able to use any
form that they conjure up for these transactions?
NO - There should be a STANDARD FORM for all these types of transactions. The regulations are inadequate, and the regulators are not functional.

5. Should Wells Fargo bank be able to do whatever they want, without being held accountable for errors?
NO. They must be stopped by government regulation and legal action.

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14. Filing A Complaint with the Federal Reserve

One place to file a complaint is with the Federal Reserve.
Use the
online Federal Reserve System Complaint Form

Alternatively,
you can also file a written report, using the
online
Federal Reserve System PDF Complaint Form

When you are screwed over by a bank, the Federal Reserve wants to know about it. FILE A COMPLAINT, if you expect to achieve any satisfaction.

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I should also file a second complaint, according to another government agency - FFIEC - the Federal Financial Institutions Examination Council- The FFIEC directs consumers with complaints and questions about their bank or financial institution to the appropriate federal bank regulatory agency that can help them. I typed in Wells Fargo, and I got the following results -

1. WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION

2. WELLS FARGO BANK SOUTH CENTRAL, NATIONAL ASSOCIATION

3. WELLS FARGO BANK, LTD.

4. WELLS FARGO BANK, NATIONAL ASSOCIATION

5. WELLS FARGO CENTRAL BANK

6. WELLS FARGO DELAWARE TRUST COMPANY, NATIONAL ASSOCIATION

7. WELLS FARGO FINANCIAL NATIONAL BANK

8. WELLS FARGO INTERNATIONAL BANKING CORPORATION

1. Office of the Comptroller of the Currency

2.
Office of the Comptroller of the Currency

3.
Federal Deposit Insurance Corporation

4.
Office of the Comptroller of the Currency

5.
Federal Deposit Insurance Corporation

6.
Office of the Comptroller of the Currency

7.
Office of the Comptroller of the Currency

8.
Federal Reserve

Since my bank was Wells Fargo Bank, N.A. , at 41st Ave. in Capitola, CA - I must presume that this means "National Association". This means that I must take my second complaint to the Comptroller of the Currency.

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15. Search for "Inherited IRA" on EACH Bank's Website

Bank Search
Bank of America
Chase
Citibank
Union Bank
Wells Fargo (WFC)

Pages returned -
13
34
159
2 (NO page offers any information)
9
(NO page offers any information)

Google searches with results -
-
Inherited IRA Disaster -
Inherited IRA Horror -
Inherited IRA Incompetence -
Inherited IRA Nightmare -
Inherited IRA F*** Up -
Inherited IRA Screw up -
Inherited IRA Curse -
Inherited IRA Trauma -
Inherited IRA Catastrophe -
Inherited IRA Calamity -
Inherited IRA Fiasco -
Inherited IRA Misfeasance -
Inherited IRA Malfeasance -
Inherited IRA Nonfeasance

2010
-
11,400 results
7,940 results
6,430 results
5,900 results
5,040 results
4,480 results
4,380 results
3,640 results
2,570 results
2,290 results
1,440 results
425 results
364 results
81 results

2014
-
5.69 M
3.58 M
2.08 M
2.94 M
2.54 M
289 K
5.70 M
7.39 M
5.43 M
4.45 M
1.80 M
2.56 M
2.64 M
2.63 M

Do you see a trend here?


Wells Fargo - Stumbling Bunglers
Wells Fargo - Stumbling Bunglers
Unconscionable Incompetence
Zero Accountability


followed by



Wells Fargo LIARS
Wells Fargo - LIARS
If you screw up, just LIE about it!
It will go away. Corporate will back you up.


Don't Be Stupid - Keep Your Money - Leave Wells Fargo NOW!

To see this page at the top of the search results -
At Google - type in
inherited ira nightmare - 2.9M results (2-11-14)
At Bing - type in
inherited ira nightmare - 203,000 results (2-11-14)
At Yahoo - type in
wells fargo ira horror - (sorry I can't link to it, due to the absurdly long Yahoo URL)


The Wells Fargo Incompetence described on THIS PAGE has resulted in the generation of these three additional Vaughn's Summaries Web Pages -

Wells Fargo Sucks

Summary of Lawsuits Against Wells Fargo - US

Lawsuits Filed Against Wells Fargo in Santa Cruz, CA

300

130- 530

120


Trademark Notice:
"Wells Fargo" is a registered trademark of Wells Fargo and Company.
This website is in no way affiliated with Wells Fargo and Company, and
the "Wells Fargo" trademark is used solely for informational purposes.

Disclaimer:
The opinions expressed on this web page are those of the author.
This web page parodies and satirizes Wells Fargo logos and symbols.
Such freedom of speech is protected by U.S. law.
This page represents FACTS. All reported errors will be corrected after verification.
The US needs to bring back rigid bank regulation, to prevent further IRA abuses.
It is the abandonment of regulation that has caused all our recent financial system woes. The big banks are eating people alive.

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Tags: inherited ira horror, inherited ira nightmare, wells fargo inherited ira horror,
wells fargo failed ira transfer, wachovia failed ira transfer
wells fargo incompetence, wells fargo negligence, inherited ira disaster



Vaughn's Summaries
©2011 Vaughn Aubuchon
www.vaughns-1-pagers.com
All Rights Reserved
This Vaughns Wells Fargo Inherited IRA web page
was last updated on 2014-04-07.