A client neglected to take an RMD from an inherited Roth. What should we recommend that he do? I’m guessing step one is to take the cumulative RMD’s , but in this case do we notify the IRS? i’m not really sure in this situation.
Thanks
Does the IRS send the taxpayer a notice that they have accepted the expalnation and are waiving the penalty?I had a client who missed part of their RMD in 2016 and he hasn’t heard anything from the IRS
I think notices of approval of the waiver are very spotty. Some get them, some do not. In this case, it is reasonable to assume that no news is good news, and of course the penalty should NOT be paid if a waiver is requested.
Permalink Submitted by Alan - IRA critic on Wed, 2018-01-17 22:27
Make up the late RMDs, then file a 5329 for each year requesting the penalty waiver for “reasonable cause”. The IRS has generally accepted even weak explanations as long as the delinquency is made up and self reported before the IRS catches it first. See the end of the 5329 Inst for how to complete the form.