Form 5329 and Paschall Case
In light of the Paschall Case-Since there is no statute of limitations if you do not file a Form 5329, is there any “preventive measures” that can be taken, such as filing a Form 5329 with zeroes every year?
In light of the Paschall Case-Since there is no statute of limitations if you do not file a Form 5329, is there any “preventive measures” that can be taken, such as filing a Form 5329 with zeroes every year?
Permalink Submitted by Alan - IRA critic on Wed, 2015-03-25 23:58
This has been suggested by some tax attorneys to start the SOL running. However, it may also be a red flag if loaded up with nothing but 0s. For most people I would avoid this. For someone who is really concerned about an excess and therefore starting the SOL, it might be a better idea to make a small excess contribution or take a small early distribution and pay a couple bucks in penalties so that the red flags are avoided. Note that the 5329 for excess contributions starts with the prior excess contribution balance, so if you put 0 on line 9 or 18 it might start the statute for the prior years as well. It also might not start the statute for prior years…………..