Client took a $100k distribution from his company Roth 401k, completely qualified-age 70+, over 5 years, all employee contributions. 1099R was reported correctly. But client did not include the distribution on his return, since it was non-taxable in his mind. Two years later, he gets a bill from IRS for $40k, saying he underreported his income. Talking to IRS on his behalf, they said don't amend the return, just send in Form 8606 on its own, with a copy of the 1099R. This form specifically references IRAs, no mention of 401k. Plus, none of the information on the form seems relevant. I could enter the basis in the account on line 22, but that seems pointless.
Leaning towards just writing a letter and submitting it with the 1099R. Any better ideas out there?