Form 8606 can be used to report distributions from Roth annuities that are not yet qualified, but not for qualified Roths. There is no specific mention of a Roth account anywhere on this or other 1099R forms on this annuity?
If you used an 8606, you would probably have to file a paper return or change the 7 code to a T or Q.
Was this Roth funded by a conversion, and if so, when? Is is possible that they could have traced this error back to a TIRA that was converted, and therefore your taxable conversion may have been understated?