Didn’t do RMD
Hi. Dispite several letters to client, she never took her RMD for 2011. We caught it in 2012. She paid penalty, took 2012 RMD, but never did take a 2011 RMD. Does she need to catch up the amount not withdrawn for 2011, or is she going to be penalized again? Or did they count the 2012 amount she withdrew as a 2011 catchup and then she will be penalized again for not having a 2012 RMD?
Permalink Submitted by Alan - IRA critic on Mon, 2013-03-18 18:28
Client should have requested a penalty waiver and made up the 2011 RMD. The IRS approves most of these requests when self reported on Form 5329 with just about any “reasonable cause” for the omission. As it stands now, the 50% excess accumulation tax paid replaces the 2011 RMD, so she can just proceed with the 2012, 2013 RMD etc. There are no more accumulated penalties to be paid.