Please see my reply to fanfare, just posed >>
"No.. I truly meant 75% - they assessed a penalty of $4872 on a missed distributions of $6496. My lines 53 and 54 have the value 0. and line 55 has no value but "SEE STMT RC 6,496" in the white space. My Waiver statement was included in the return (last page) followed by explanation letters from my custodian on their letterhead."
I sent the IRS a reply today with a full typewritten letter, including copies of my original 5329 and 1040 schedule 2 and the Waiver Explanation (both from TurboTax), and again the explanation letters from my custodian, and requested them to review their assessment.
On the CP11, forst page, there is a heading "Why we changed your information", and under that a bulleted explanation "We changed the amount of addition tax on IRA's and other qualified retirement plans, reported on your tax return. There was an error transferring the tax from Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts."
I'm guessing that it's not unlikely that no human even looked at my return, but I have no conjecture at all about how they came to the amount of tax assessed. It's a messed up sitution, but it's clear that either their system or else some reviewer expected tax to be transferred from my 5329 to my 1040 Schedule 2, line 8.
