A couple of weeks ago, I raised the question of whether Secure Act Section 313 was retroactive and could be applied to avoid a late 2019 distribution. You correctly replied that the effective data of Section 313 was not clear and it was unknown when or if IRS would clarify this question, leaving the decision up to the client.

Client has decided to take that late 2019 distribution in 2023 (in addition, he will also take his 2023 RMD by year-end), understanding he will report both distributions in his 2023 return.

This issue also applies to taxpayer’s spouse for 2019, although to a much lesser extent. She has also taken her late 2019 distribution in 2023 and will also take her 2023 RMD by year-end.

My additional question is to Form 5329. I assume that the same SOL issue would also apply to penalties applicable to late distribution years. So, my thought is that Form 5329 should be filed for 2019 for each spouse requesting relief from their respective potential penalties. Is my thinking correct?

Can each 2019 Form 5329 be separately filed by the respective spouse (applicable to each’s 2019 late distribution) or is it safer to filed 2019 Form 1040X since there will be more than one Form 5329 for that year? Also – when should the forms/return be filed?

As always, your thoughts are appreciated.