Waiver of 50% Penalty
We recently filed Forms 5329 requesting a waiver of the 50% penalty for 2013-2017 on behalf of a client. IRS waived the 50% penalty for all years but 2016. Their letter for 2016 stated that they determined that no action was necessary on the account. They further stated that there was no tax to abate since there was none assessed for this tax year. It appears that the client is ok for 2016. I’m wondering if someone at the IRS just generated the wrong letter or if there is still something to worry about for 2016.
Permalink Submitted by Alan - IRA critic on Tue, 2019-06-04 17:27
If 2016 was no different than the other years, it does make sense that the IRS responded differently for just that year. If the forms were sent in a different times or filled out differently, different IRS agents might have processed them. I would not worry about this, but if the IRS ever bills the penalty, you could file another 5329 for 2016 at that time.