Missed IRA RMD

Forum|Forum|3 years ago
April 5, 2023
3 replies
20 views

I missed taking an IRA distribution in 2022 because the mutual fund (Vanguard) changed accounts and lost my instructions for an automatic distribution in December. I realized the error at the very end of December and had them take the distribution on January 4th. I called the IRS and was told to include a letter with my return and the penalty most likely would be waived. I saw that TurboTax has a place for an explanation and I filled that out. My question is: Do I still need to send a letter with my return? That will make a difference whether I file electronically or mail it in.

JulieS

Level 15

No a letter is not required if you have filled out Form 5329 correctly and have a penalty waiver statement included.

Your penalty waiver statement should include these points:

When you discovered the problem.
What you did to resolve it.
The missed distribution was intentional.

You already asked for a waiver and included your statement, so you should be all set.

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fanfare

Level 15

@JulieS

You'd better say the missed distribution was unintentional.

you need Reasonable Cause to be granted a waiver of the penalty.

cc @pta4104

pta4104Author

Level 2

Yes, in my explanation I noted that I had that IRA set for automatic distribution in December of each year. When Vanguard changed accounts over in fall 2022 apparently they did not transfer the instruction. I caught it over the long New Year weekend when I started pulling tax "stuff" together. I doubt that I am the only Vanguard customer that this happened to.