@ProbablyMike wrote:
So the IRS assesses penalties after they receive my taxes? or is the penalty sent to me from Fidelity for me to enter on my tax form? If the IRS assesses the penalty after I send my taxes, maybe they wouldn't charge the penalties. That would be great.
Income taxes are mostly on the honor system. In theory, the IRS could look at your tax returns and deduce that you were not taking RMDs on this inherited IRA. In practice, they don't really do this. But if you are selected for audit, they can go back and find everything.
Separately, there is a 3 year (sometimes 6 year) statute of limitations on tax returns. It is possible, that the IRS can no longer penalize you for missed RMDs more than 6 years back. But I would want advice from my own local professional on that.
