@unsureof1099s wrote:
Thanks. Do I have to pay the penalty (which is a lot) and then hope to get it back, or can I just send the form? The form says to pay the tax.
You do not pay the tax.
The form for line 52 says "see instructions".
The instructions say:
Waiver of tax for reasonable cause. 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.
You ask for the entire amount to be waived, then when you subtract that amount line 54 will be zero and the tax due will also be zero.
**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.**
