Received an under payment notice from IRS couple of month ago for tax year 2012. My 401K company give them a 1099R. I took paternity leave to take care of my wife and new born son in 2012. I took two month leave of absence. At that time, I am carrying a 401K loan from JP Morgan, balance is $25K with $426.24 payment automatically deducted from each paycheck. Because the leave is unpaid, the payment was stopped on March 2012. When I came back after short leave, JP Morgan claimed they recalculated my loan payment and re-amortized the new payment to around $450 and noticed our payroll, but our payroll did not get the notice and still paying original amount which is $426.24. When JP Morgan received the payment, they think I missed my payment because it is “Partial” payment, after 9 month, they reported I defaulted my loan. During that period, I never receive any notice of loan default notice, I selected use email as preferred communication method, and they implies that might end up in my spam folder. I also never received their 1099R which supposed to send via mail in early 2013.
After month back and forth negotiation, I worked out settlement with my employer(not cover JP Morgan) and I just paid tax and penalty total over $14K to IRS based on 1099R for tax year 2012. When JP Morgan issued the 1099R, that means early withdraw was made, once I paid the tax and penalty on it, I don’t have any loan obligation anymore. But now JP Morgan still ask me to payback the loan, actually I was keep on pay the loan since 2012, now the loan balance is only $5K.
JP Morgan is very bully and arrogant, JP Morgan refuse to correct 1099R, and still holding me responsible for the loan after I paid tax on it, what should I do?
