Anyone Holding Templeton Emerging Market Fund/Seeking 1099 Info

[Amethyst]

My tax return was ready to go to the IRS more than a month ago, but an issue with Equiniti, the holding company for one of my investments, is holding it up. I'm out of ideas.

In December, 2023, I received a letter from Franklin Templeton, stating that Templeton Emerging Markets Fund (EMF) had declared a dividend payable on 29 December 2023. The letter stated that the estimated dividend would be $.1833 per share net investment income, $0.0 per share capital gains, and $.5437 per share as return of principal. If this estimate proved accurate, I expected to receive a Form 1099-DIV with about 25% of the paid amount in Boxes 1a/1b (taxable income) and about 75% in Box 3, Nondividend Distributions.

When my 1099-DIV for EMF, from AST/Equiniti, finally arrived, however, it reported the entire amount of my distribution as taxable income in Box 1a, Ordinary Dividends, with 48% also appearing in Box 1b, Qualified Dividends.

On Feb 22nd, after a long time on hold with Equiniti and being passed around to this department and that, a rep informed me that Templeton's tax form instructions to AST/Equiniti were for 48% to be taxable, and 52% non-taxable. While this is different from December's estimate, it is also very different from the 1099-DIV (attached) which I received. Shouldn't the 1099-DIV show 48% as the total of Boxes 1a and 1b, and 52% in Box 3?

I pointed this out to the representative, who instructed me to email "Correspondence" describing my issue, and attach both the original letter from FT and the 1099-DIV. I did this right away, and received an auto-acknowledgment.

Since then, I've gotten one email from Equiniti, saying they're working on it and will get back to me soon. On March 12th, I tried to get a status. I spent another hour and a half on the phone, finally reaching a rep who understood nothing, and was high and mighty about it. He put me on hold and came back to say that I would be hearing from a Ms. Alexander who was looking into it and would get back to me very soon. I asked if I could speak to Ms. Alexander directly; he said no, she would call me. Since then, crickets.

This is the first time I've ever had a wrong 1099 and I don't know what else to do. Anybody else had such an experience? What would you do at this point? I sure hate to file the 1099-DIV as it is, and then file an amended return if and when I finally get an answer.

[Mod Edit: Please see post #9 for additionally requested Information]

 

[GrayHare]

I'd wait into April for a corrected 1099. If it does not arrive, I'd enter the incorrect 1099 numbers into my return, then apply an adjustment to those numbers that reflects the values from the December 2023 letter. Then I'd enclose a copy of that letter with my return.

 

[freedomatlast]

You still have about a month to get this straightened out.

I would not send the IRS information you know is incorrect. With amended returns in the mix, you're just asking for more issues, this time with the IRS not putting two and two together.

I'd call and bug them every single day until the issue is resolved. Tell them by law they owed you correct tax information by 1/31/24 and they have failed. Tell them you will be contacting your state attorney general and your state senator's office filling them in on all the details. You'll get moved to the front of the line into their escalation department if you're enough of a pain in their bottom.

I recently had to do this to a third party tax collector who is responsible for collecting our local income tax. They never sent me last years refund of $173 and this year they owed me $550 and sent me $21 instead. After being told someone would call me back and of course they didn't, I'd call again and again and stay on the line and not take no for an answer until they escalated to someone who had authority to solve the issue. Tell them you will hold till they get ahold of someone who can help and if they say you can't, tell them you'll have to hang up on me then. If they hang up on you, document it and call back again. Document every call and the names of every person who you talked to and what they told you. Be polite and calm, but unrelenting and persistent. Squeaky wheel and all that.........

 

[Morgan22]

You could file for an extension if you don't get your corrected 1099 by mid April. You just have to make sure you pay what you believe you will owe before April 18th.

Then you'll have until Mid-October to file your complete return.

 

[Amethyst]

I know; it just infuriates me because I'm due a return. I overpaid in 2023, expecting year-end distros to be like 2022's, which they weren't.

I don't get the whole thing about holding companies, anyway. Franklin Templeton is an investing firm in its own right.

You could file for an extension if you don't get your corrected 1099 by mid April. You just have to make sure you pay what you believe you will owe before April 18th.

Then you'll have until Mid-October to file your complete return.

 

[pb4uski]

Have you complained to Franklin Templeton? It sounds like they may be the problem anyway in that they send you a letter indicating one thing and then allegedly instruct Equiniti to report something very different on the 1099.

Did the total distribution on the 1099 agree to what you received in total?

Equiniti is the man in the middle between you and Franklin Templeton and you are still Franklin Templeton's customer, right?

 

[Amethyst]

1. I called FT today and got nowhere, as I do not have an account with them. I also haven't found any references on the FT web site or online to a breakdown of the year-end distro.

2. Yes, the total distro agrees with what was announced for EMF ($.727 per share). Minus a small amount of foreign tax paid.

3. I inherited the holding from my husband, and the holding company changed from AST to Equiniti this year (it's the same customer service though).

Have you complained to Franklin Templeton? It sounds like they may be the problem anyway in that they send you a letter indicating one thing and then allegedly instruct Equiniti to report something very different on the 1099.

Did the total distribution on the 1099 agree to what you received in total?

Equiniti is the man in the middle between you and Franklin Templeton and you are still Franklin Templeton's customer, right?

 

[cathy63]

I suggest starting a new thread (or asking a Mod to retitle this one) to see if anyone else here holds EMF in their portfolio. If so, perhaps they'd be willing to share the div details their brokers reported. If all the other brokers did it the same way that Equiniti did, then the odds are that Equiniti did it correctly.

You could also ask over on Bogleheads. A search shows it's been mentioned a few times there, but not recently.

Once you have more info, you can make a better decision about how to deal with this. If other brokers are reporting 52% as a non-div distribution in box 3, you can go ahead and file your tax return as if Equiniti also did that. Save the letter you received, your correspondence with Equiniti, and any forum posts or private correspondence you find describing how other brokers reported the data. Then if the IRS notices a difference in what you reported you will have something to show them. I think it's not very likely that they'll notice or care though. When you report a 1099-DIV on a tax return you don't send the EIN, just the name of the payer and the amount, so there's no field-by-field matching as there is for W-2s.

If you do file your return now with the info from the current 1099, it's really not that big a deal to amend if they correct it later. You can efile the amended return and have the additional refund direct deposited; though if you are paying someone else to do your return it's pretty annoying to have the extra expense.

... I'd call and bug them every single day until the issue is resolved. Tell them by law they owed you correct tax information by 1/31/24 and they have failed. Tell them you will be contacting your state attorney general and your state senator's office filling them in on all the details...

If you do have to threaten them, maybe try FINRA and the SEC instead of your state officials.

Also, you do not have to keep these shares at Equiniti. If you have a brokerage account you can ask them to transfer the shares from Equiniti to your other account.

 

[Amethyst]

Mods, would you please retitle my thread to include EMF as cathy63 recommends?

Thanks,

Amethyst

I suggest starting a new thread (or asking a Mod to retitle this one) to see if anyone else here holds EMF in their portfolio. If so, perhaps they'd be willing to share the div details their brokers reported. If all the other brokers did it the same way that Equiniti did, then the odds are that Equiniti did it correctly.

You could also ask over on Bogleheads. A search shows it's been mentioned a few times there, but not recently.

Once you have more info, you can make a better decision about how to deal with this. If other brokers are reporting 52% as a non-div distribution in box 3, you can go ahead and file your tax return as if Equiniti also did that. Save the letter you received, your correspondence with Equiniti, and any forum posts or private correspondence you find describing how other brokers reported the data. Then if the IRS notices a difference in what you reported you will have something to show them. I think it's not very likely that they'll notice or care though. When you report a 1099-DIV on a tax return you don't send the EIN, just the name of the payer and the amount, so there's no field-by-field matching as there is for W-2s.

If you do file your return now with the info from the current 1099, it's really not that big a deal to amend if they correct it later. You can efile the amended return and have the additional refund direct deposited; though if you are paying someone else to do your return it's pretty annoying to have the extra expense.



If you do have to threaten them, maybe try FINRA and the SEC instead of your state officials.

Also, you do not have to keep these shares at Equiniti. If you have a brokerage account you can ask them to transfer the shares from Equiniti to your other account.

 

[MarieIG]

Mods, would you please retitle my thread to include EMF as cathy63 recommends?

Thanks,

Amethyst

Done (although there is a limit to the length I can make the thread title so some of the old wording could not fit.)

 

[pb4uski]

OP, have you computed your tax with a 1099 based on the letter (25% income and 75% return of capital) compared to the 1099 that you received that was 100% income/48% qualified income)? Is the difference in tax enough to bother chasing a resolution?

Is there any contact information on the letter?

 

[OldShooter]

IIRC there is irs.gov guidance on how to handle 1099 errors and it wasn't a big deal. Sorry I don't have the link for you though.

 

[FiveDriver]

Based upon our experience, Equiniti was a real horror show. They have made a few errors in titling the Account holder's name and TOD designations. Spinoffs from MRK and GE were particularly troublesome to those guys.


They are not worth the effort, we sold almost everything they were holding.

 

[MarieIG]

Based upon our experience, Equiniti was a real horror show. They have made a few errors in titling the Account holder's name and TOD designations. Spinoffs from MRK and GE were particularly troublesome to those guys.


They are not worth the effort, we sold almost everything they were holding.

I sold Franklin Templeton and transferred Merck out over to TD Ameritrade (Schwab).

 

[Amethyst]

Yes, the difference is significant enough to warrant the trouble I've gone to so far.

If there had been contact info on the letter, you can bet I'd have called it 3 times by now.

OP, have you computed your tax with a 1099 based on the letter (25% income and 75% return of capital) compared to the 1099 that you received that was 100% income/48% qualified income)? Is the difference in tax enough to bother chasing a resolution?

Is there any contact information on the letter?

 

[pb4uski]

I should have known you have ot nailed. Good luck.

I'm guessing if you report the income based on the letter you received that when it doesn't match the 1099 that you'll get a letter from the IRS. Then you respond including a copy of the letter and that you tried to get the issuer to correct the 1099 and they didn't respond. Then the IRS might chase the issuer like you are trying to.

 

[Amethyst]

I have been a pest, but also sweet as pie, even when I wanted to [-]strangle[/-] chide somebody, on the phone to Equiniti all week. Very compartmented, need-to-know business.

I also tried Franklin Templeton, but the nice man said he couldn't help me because I don't have an account with them, even though I own one of their funds.

Finally, I learned that my request got passed to their Tax department. Supposedly the Tax department sent me a postal letter of explanation. No sign of it yet.