IRS Notice 2022-53 question

Submitted by Kevin O'Hearn on Mon, 2022-10-10 16:52

In notice 2022-53 the IRS gave an update on the status of some of their proposed clarifications of the SECURE Act is it relates to whether certain beneficiaries subject to the new 10-year depletion rule will also be subject to RMDs in years 1-9. Can you please confirm if the summary below is accurate and how you interpret the recent notice? Thanks!

1. They have not officially decided what the regulations will be, but have notified taxpayers of their intent to issue final regulations.

2. The new regulations, if passed, will only apply to distributions years starting in 2023; so clients do not have to worry about satisfying any RMDs before 12/31/2022.

3. Clients will not be penalized for RMDs not taken in 2021 and 2022 if the new regulations require them moving forward.

4. While we know that the IRS will not consider distributions not taken in 2021 and 2022 to be subject to penalty, it is unclear if the final regulations will still require beneficiaries to distributions outstanding RMD amounts for 2021 and 2022 at a later time or not.



Submitted by Alan - IRA critic on Mon, 2022-10-10 17:44

  1. Agree.
  2. Agree, but while the IRS is waiving these RMDs for 2021 and 2022, they did not say whether these RMDs would be permanently waived, would be required to be made up in 2023, or whether the IRS will be content to not receive the deferred RMDs until year 10.
  3. Agree, no penalty and no need to file a 5329 to request waiver of the penalty.
  4. Agree. While 2020 RMDs were waived, we are approaching 3 years since the Secure Act became law. While much of this delay could be attributed to passing the Act at year end, Covid, and IRS staffing and budget deficiencies, some of the overly complex IRS provisions included in the proposed Regs reflect no consideration for simplification of the rules or the practical implications of enforcing these provisions. The IRS may not be in position to enforce beneficiary RMDs for years, and custodians willl be hard pressed to take on the full responsibility. Even under the prior much simpler Regs, beneficiary RMD compliance and reporting has been dysfunctional. 

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