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jpeters888
New Member

I just got notified that an IRA annuity had not paid me RMDs since 2017. They want to send them to me now. Do I take them and file amended returns?

If I don't take them, will the IRS get modified 1099s? Will they charge me penalties?
4 Replies
DanPaul02
Level 7

I just got notified that an IRA annuity had not paid me RMDs since 2017. They want to send them to me now. Do I take them and file amended returns?

You take the RMDs and file amended returns.  You will probably be charged penalties for most years.  If depends on your age.  

VolvoGirl
Level 15

I just got notified that an IRA annuity had not paid me RMDs since 2017. They want to send them to me now. Do I take them and file amended returns?

You don't amend to report the RMD.  It will get reported on your 2021 return as one total amount.  You may need to amend the missing years to report you didn't take the RMD and pay a penalty for missing it.   Did anything show up on those years as taken or missed?  Turbo Tax should have asked you if you took the RMD.

Critter-3
Level 15

I just got notified that an IRA annuity had not paid me RMDs since 2017. They want to send them to me now. Do I take them and file amended returns?

First a few questions ...   was this your ONLY IRA ?   Was this the only thing in the IRA ?    Were you 70.5 in 2017?  

macuser_22
Level 15

I just got notified that an IRA annuity had not paid me RMDs since 2017. They want to send them to me now. Do I take them and file amended returns?


@jpeters888 wrote:
If I don't take them, will the IRS get modified 1099s? Will they charge me penalties?

The penalty for a missed RMD is huge.  It is 50% of the amount not distributed that should have been and you still must remove the money.

 

You cannot amend and apply a RMD after the end of the year that the RMD was for.    You take the missed RMD's as soon as possible and it will be reported on a 1099-R for the current year.

 

However, you can ask the IRS to waive the penalty by filing a 5329 form for each year that the RMD was missed and include an explanation  as to why it was missed.  Be sure to say that the missed RMD's  have now been taken.

The IRS almost always grants the waiver.   Each 5329 must be on the form for that year.

 

From 5329 instructions:
Quote:
"Waiver of tax. The IRS can waive part or all of this tax if you can show that any shortfall in the amount of distributions was due to reasonable error and you are taking reasonable steps to remedy the shortfall. If you believe you qualify for this relief, attach a statement of explanation and file Form 5329 as follows.
1. Complete lines 52 and 53 as instructed.
2. Enter “RC” and the amount of the shortfall you want waived in parentheses on the dotted line next to line 54. Subtract this amount from the total shortfall you figured without regard to the waiver, and enter the result on line 54.
3. Complete line 55 as instructed. You must pay any tax due that is reported on line 55.
The IRS will review the information you provide and decide whether to grant your request for a waiver. "

 

Do NOT pay the penalty - the IRS will bill you in the rare event if they deny the waiver.

Line 55 (the penalty) should be zero.

 

You can download blank 5329 form for the past years here (enter 5329 in the find box):

https://apps.irs.gov/app/picklist/list/priorFormPublication.html

 

Mail the 5329 form certified mail with tracking to the same address that a 1040 tax return is sent.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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