I just recently noticed that an Advisory client of my firm missed a significant 2022 rmd, your input would be greatly appreciated. Here’s the scenario.

Client age 88 died early November, 2022. His RMD was scheduled to be distributed 12/01/2022, however due to the fact that the death had been reported prior to 12/01/2022 custodian was unable to distribute RMD to his spouse-age 80. In attempt to meet
year end deadline we were instructed to transfer IRA proceeds to spouse and take distribution from her account (44K). Due to
somewhat extenuating circumstances, in big part to be blamed on custodian RMD did not get paid out until 01/10/2023 which would trigger and IRS penalty of 50%. I am aware of the process utilizing IRS form 5329, which I would hope would eliminate the penalty, but curious if anyone has heard of a waiver that would be a work around in this. I stumbled upon this on this site, and will quote verbatim:

“If the original IRA owner dies late in the year and has not yet taken his/her RMD, there is a good chance the year-of-death RMD
gets missed. Such situations have been so prevalent that the IRS recently created an extension for missed year of death RMD’s.
There is now an automatic waiver of he 50% penalty if the RMD is taken by the beneficiary’s tax filing deadline, including extensions”.

Is anyone familiar with this waiver, and if so where to find in the code?

Many thanks-hope to hear from you!