Client just informed us neither they or the investment firms prepared 1099-R/1096 for 2008. If this problem is now going to get resolved, should the '08 1099-Rs just be issued as usual despite being 3 months late?? Thanks in advance for any help.

There may be a penalty for being tardy, but no reason to let it get any worse.

The penalty is $30/form that was filed late (after March 30 and before Aug 1). You may be able to get a waiver of the fine. (see p. 13 of the General Instructions for 1099: http://www.irs.gov/pub/irs-pdf/i1099gi.pdf) [thanx to David Rigby for pointing me there a coupla months ago...]

However, I'd figure out a response to the person if and when he or she comes back and asks for reimbursement of the cost to amend personal income taxes.