@DIY_Tax_Person wrote:
I actually got a conflicting opinion from another tax accountant (not from this forum). They said that basically the payer (Vanguard in this case) already determined that these payments to me are not subject to the penalty, and because of that, form 5329 is NOT required. They said that there is nothing wrong if I choose to add the form.
I would be curious to hear what your response is to this, as well as what other tax people in this forum think.
Because there is NOTHING on a 1099-R that identifies this as a SEPP except the attached 5329 with a code 02 on line 2, you would be very likely to receive a letter from the IRS in a year or so asking for additional tax. It is better to file the 5329 to avoid having to explain later.
**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.**
