Today evening I received a cryptic/ scammy sounding email from Vanguard "Client-Reimbursement" essentially saying they offer to pay me some money. I assumed with rampant Internet scams, this is some such but there were no links (good).
So, I logged into VG and sure enough there was a secure message from them "Reimbursement Notification".
In reviewing your accounts, we have determined that you are due reimbursement.
This reimbursement relates to how cost basis was applied to one or more trades in your account. Specifically, we determined that, in limited circumstances, your Specific Identification (“SpecID”) instructions were not fully honored as intended. Instead, due to an inadvertent system issue, one or more lots that you selected via SpecID was replaced with the lot that would have been selected using a default method such as First-In, First-Out (“FIFO”). If your original SpecID and the updated lots had different cost basis values, this issue could have impacted your federal and state tax liabilities.
Accordingly, we are providing this stipend for you to engage a tax professional for accounting and advisory services. This payment will be made on or before March 31, 2025. You will receive Form 1099-MISC in early 2026 for this payment.
The amount they offer is minor (~1K $). I have been with VG for more than 30 years now and they don't offer any specific dates or years or securities.. Its clearly not worht my time to go through dozens of past tax years to understand which if any (or multiple) could be affected. Even if I do find out which year errors were made, one would have to file amended federal and state taxes and even that would require VG issuing corrected 1099s for each year...
What a mess and not worth my time so at this time I intend to just punt, not contact them about it, collect my 1K, pay taxes on it and move on.
Just irritated that on something this basic: following client orders on specific ID or FIFO or LIFO or tax optimized algorithm for picking tax lots, a large brokerage like VG can mess things up. Their IT definitely is having issues.
Wondering if I am alone or this is a wide circulation email sent out to lots of people indicating a more widespread problem. Didn't say anything specific to just my account.
So, I logged into VG and sure enough there was a secure message from them "Reimbursement Notification".
In reviewing your accounts, we have determined that you are due reimbursement.
This reimbursement relates to how cost basis was applied to one or more trades in your account. Specifically, we determined that, in limited circumstances, your Specific Identification (“SpecID”) instructions were not fully honored as intended. Instead, due to an inadvertent system issue, one or more lots that you selected via SpecID was replaced with the lot that would have been selected using a default method such as First-In, First-Out (“FIFO”). If your original SpecID and the updated lots had different cost basis values, this issue could have impacted your federal and state tax liabilities.
Accordingly, we are providing this stipend for you to engage a tax professional for accounting and advisory services. This payment will be made on or before March 31, 2025. You will receive Form 1099-MISC in early 2026 for this payment.
The amount they offer is minor (~1K $). I have been with VG for more than 30 years now and they don't offer any specific dates or years or securities.. Its clearly not worht my time to go through dozens of past tax years to understand which if any (or multiple) could be affected. Even if I do find out which year errors were made, one would have to file amended federal and state taxes and even that would require VG issuing corrected 1099s for each year...
What a mess and not worth my time so at this time I intend to just punt, not contact them about it, collect my 1K, pay taxes on it and move on.
Just irritated that on something this basic: following client orders on specific ID or FIFO or LIFO or tax optimized algorithm for picking tax lots, a large brokerage like VG can mess things up. Their IT definitely is having issues.
Wondering if I am alone or this is a wide circulation email sent out to lots of people indicating a more widespread problem. Didn't say anything specific to just my account.
Statistics: Posted by Dirghatamas — Thu Feb 20, 2025 11:07 pm