However, in my case, I believe that my Custodian was negligent in telling me that I could do such a recharacterization when specifically told the representative that I wanted to simultaneously do a recharacterization (of a previous conversion in 2018) and another Roth conversion, and his advice was to simply do them in 2 separate forms, which I did. Then, the Custodian took a very long time - a week - to come back and tell me that the earlier representative's advice was incorrect. Had the representative's advice been correct, I never would have submitted either form. When finally told of this inability to do a recharacterization, I asked that under the circumstances that that 2nd Roth conversion be rescinded - not recharacterized. (I have had similar errors rescinded without recharacterization, such as when the Custodian mistakenly did a complete Roth conversion rather than a partial one that I had requested, etc.)
OK, so I think I have a sliver of standing to contest this, and I plan on filing a complaint with FINRA. Under the broad idea of "it doesn't hurt to ask", I'd like to see if the IRS agrees with me in this case; However, I'm not sure how to go about this without officially filing my tax form with the way I think it should be done (i.e., with the 2nd Roth conversion rescinded), and letting the IRS wheels in motion come back and tell me that there was some unreported Roth conversion in a 1099-R form, at which time I could give me reasoning for which I think it should not be reported. In all probability, the IRS will rule against me, but I'd like to get my Due Process. I wouldn't have a problem with the interest charged, or even a penalty, if it's not too much; I want to be very out in the open with this. I just don't want to get slapped with a giant 75% penalty. The amount of extra tax liability would be less than $1K, so there would be no problem with not making quarterly payments, and it seems that it would not trigger the dreaded "substantial underreporting of income" as the threshold is $5K.
Any ideas?