Missed RMD Penalty Waiver

[db2016]

I am using the following explanation to request a missed RMD waiver. Wondering what my chances are and if I should be including anything else. Help greatly appreciated. ??? used to remove confidential information.

This is ????'s son, I take care of her finances and taxes (she is 83).
There were a couple of issues causing me to miss her RMD. First off was
that we had virtually all family members (including myself) with Covid
symptoms and I was frantically calling around to get rapid and PCR tests
but the omicron outbreak made them very hard to find. Second was that my
daughter was rear-ended on Dec 23rd and I was dealing with the insurance
companies. I didn't remember until 1/4/22 and immediately withdrew the
remaining $??,??? (on that day). I didn't due it earlier in the year
as my mother makes charitable contributions from her IRA and I have to
wait till late in the year so I have an accurate remaining RMD. I've set
a recurring calendar notice for 12/26 so that I don't make the same error
again. We greatly appreciate your consideration to wave the tax penalty
for my mother based on my error. Her 2022 withdraw will include the RMD
from 2022 and the $??,??? missed for 2021. We have never missed her
RMD before.

[macuser_22]

Be sure you have taken the missed RMD and include that it has been taken in the explanation.

You will need to file a 5329 form and request a waiver of the penalty. (The waiver would only be denied if there is no reasonable explanation and the missed RMD was not taken at all.)

Unfortunately this can only be done using the "forms" mode that is only available with the desktop software if you do not have a 1099-R to file.

If you do have a 2021 1099-R to report then the RMD question in the interview will go to the form 5329 waiver interview if you say that the 2021 RMD was not taken.

If you are using the CD/download version:

Enter the forms mode and click on open form. Type in 5329. Choose 5329-T for the taxpayer (first person listed on your tax return), or 5329-S (for spouse - 2nd person on tax return).

Scroll down to Part IX line 52 and enter the RMD amount that should have been taken. On line 53 enter the amount of the RMD that was actually taken (probably zero if it was missed).

Then in the box right under line 53 "Waver of Tax Smart Worksheet" enter the same amount as line 52 (the RMD amount). Then click the "Explanation" button and enter the reason for missing the RMD and your statement requesting a waver.

You will not pay any penalty now until the IRS determines if it will grant the waver, then they will inform you if you owe the penalty.

OR - if using the Online version and have no 2021 1099-R to file, you will have to prepare the 5329 manually .

Download the 5329 form from the IRS website and fill it out the same as above. Print and mail your return with the 5329 form and explanation attached as described in the 5329 instructions.

The 2021 5329 must be attached to your printed and mailed 2021 tax return and cannot be e-filed.

[NOTE: You can only use this method if you are requesting a waver of the penalty and there is no taxable amount on the 5329 form line 55 that must be transferred to the 1040 form]

From 5329 instructions:
Quote:
"Waiver of tax. 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.
The IRS will review the information you provide and decide whether to grant your reques for a waiver. "

Download blank 2021 5329 form here:
https://www.irs.gov/pub/irs-pdf/f5329.pdf
https://www.irs.gov/pub/irs-pdf/i5329.pdf