My friend inherited an IRA after his father passed away in 2006; his father had not begun taking distributions from the IRA. The account was not transferred into my friend’s name until 2008. Due to poor advice from his financial planner at the time, RMDs were taken in 2011 and 2012 and nothing else was done. It is my understanding RMDs should have begun one year following the death of his father or the full balance should have been withdrawn within 5 years of his father’s death. In this case it would be 2012 since 2009 was a waiver year. The IRA is only worth $8,000 so he would like to withdraw the balance and use it to fund his Roth IRA and not deal with the headache of taking a distribution each year. The question is, can he withdraw the balance now and submit a separate Form 5329 showing the RMD calculation for years 2007, 2008, 2013, 2014, 2015 and 2016 and ask for a penalty waiver for reasonable cause? Or does he have to submit Form 5329 for 2012 showing the full balance withdrawn and calculate the excess accumulation penalty and ask they forgive the penalty? Would he have to file Form 5329 for any subsequent years in that scenario? We are trying to limit the possible penalty and tax impact. He understands he will have to pay tax on the balance withdrawn on his 2017 taxes. His RMDs for 2011 and 2012 were $200 on average so it seems like paying a 50% penalty on those six years would be much better than a 50% penalty on the full balance. What is the best way to proceed?