That's right - I did not think of that. That could be bad. I believe for 1986 that up to $2,250 could be contributed so if that was the amount contributed and it was not deducted then the 6% penalty that repeats every year would add up to about $4,590 by now and that is only for 1986. If other earlier years then that can be much more. Then there is also the failure to file 8606 for 34 years that is about $1,700.
If that is the case then you might want to consult with a tax professional or tax attorney that is licensed to practice before the IRS and might be able to negotiate an abatement or compromise of the penalties owed.
**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.**
