[suchende]

May I asked for your help in solving the following problem:

I purchased a 5-year CD with compounding interest (cumulative). The Disclosure document I received from the bank states: pp.
"6. Certificate of Deposit:
6.7 Interest Payment Method:... If you opt to receive compounded interest (cumulative), we will pay you interest along with the principal at the time of maturity of the CD.
Further under
6.12 Tax Reporting: A report on the interest of $10 or more earned by you on your Certficates of Deposit will be sent to the Internal Revenue Service for the year in which the interest is paid, along with a copy to you. Where interest is paid only at the time of maturity, this reporting will be done in the year the CD matures."
pp.

Since the CD will mature in 5 years, I do expect that according to the bank's disclosure statement (see above) the compounded interest together with the principal will be paid to me at maturity of this CD and at that time also will be reported to the IRS.

Unfortunately, the bank did not follow their Disclosure Statement: I received already a 1099-INT for 2008. Since it is of utmost importance for me to NOT have the income of the compounding interest reported in 2008 but in 5 years (I am otherwise above the limit set by a pharmaceutical manufacturer from whom I get my desperately needed medicine for a discount; I can't afford it otherwise... ), I tried to reason with the bank. To no avail.

If anyone can help me, show me steps I can follow, to rectify this error by the bank, I would greatly appreciate this.

With friendly regards, S.

[MukatA]

Read IRS Publication 17: Your Individual Income Tax, Chapter 7; Taxable Interest -- Certificate of deposit and other deferred interest accounts.
"Certificates of deposit and other deferred interest accounts. If you open any of these accounts, interest may be paid at fixed intervals of 1 year or less during the term of the account. You generally must include this interest in your income when you actually receive it or are entitled to receive it without paying a substantial penalty. The same is true for accounts that mature in 1 year or less and pay interest in a single payment at maturity. If interest is deferred for more than 1 year, see Original Issue Discount (OID) , later."