Yes, it's correct. The IRS assumes that income is spread evenly over the year, and withholding is spread evenly over the year, but payments are made on the date they are made. That means that if you convert, say $40,000 in August, the IRS will expect to see tax payments of $2500 in all 4 quarters, April 15, June 15, Sept 15 and January 15. There are 3 ways around this issue.
1. Use the annualized income method to recalculate the payment. This will be under "other tax situations," to access form 2210 and select the annualized income method. This is a way of showing the IRS that your income was not evenly spread out, but your payments matched your income in each quarter.
2. Do the conversion in the first quarter (January 1 -- March 31). Here the IRS assumptions work in your favor. If you owe $10,000 in tax, the IRS will want to see $2500 on April 15, June 15, Sept 15 and January 15, and you will be considered to have made your payments "on time" if you pay on this schedule instead of all at once. So you can hold on to the funds and invest them in the mean time and earn a little extra interest.
3. Do the conversion, have taxes withheld, and make up the difference from other funds. Suppose you convert $40,000 and have $10,000 withheld. Because the IRS assumes income and withholding are both spread out over the year, your withholding will match your income and you won't come up short. Then, make an additional payment of $10,000 from other funds to the Roth IRA (presumably the money you would have made the tax payment with) as a rollover contribution. This must be done within 60 days of the initial withdrawal from the traditional IRA. You don't have to explain to the Roth IRA where the money came from or that it is part of the conversion, just tell them it is a rollover. They don't need to know where the money came from or that it was part of a larger transaction, that gets worked out on your tax return and is between you and the IRS.
