My custodian failed to make a required automatic withdrawal by year end 2023. I had that corrected by Feb 8. I filed form 5329 and requested a full waiver of the penalty, but I left line 55 blank and did not check the "Yes" box. I filed by mail so that I could include documentation from the custodian stating that they made the error and had made the distribution in 2024 and stating the amount.
Middle of May I got hit with a CP111 notice assessing taxes due equal to 75% of the missing distribution! The CP11 stats that they found an error on my return in in transferring the tax from form 5329. It appears they expected a value on line 55, which would be transferred to line 8 of 1040 schedule 2.
I completed the 5329 entries myself - not step-by-step, and note that when a waiver is requested, if one tries enter an amount of line 55, one cannot and the software redirects to the Explanation Statement. I also note that in the IRS instructions the amount one requests to be waived that is entered in the white space on line 55 (following "RC") is supposed to be enclosed in parenthesis.. which turbotax fails to do... one cannot add them manually either.
Bottom line, everything points to TurboTax massively screwing this up. The CP11 gives one a deadline by which they must be contacted by phone or mail to contest and request correction, but the folks on teh phone can do absolutely NOTHING for you.
Beware..
