RMDs not taken due to family attribution error

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We discovered a participant in a 401(k) profit sharing plan did not take Required Minimum Distributions. These RMDs should have started in 1997. The participant was born in 1930 and is still actively working at his son's business. The father does not own any part of the business, but the family attribution ownership rules we discovered apply. I'm going to advise the client to take the 2004 RMD prior to 12/31/04. I'm going to further advise they take all past due RMDs by 12/31/04. Question #1: Can I reduce each RMD calculation amount by the amount they should have previously taken? For example, can I reduce the 1998 calculation balance by the amount they should have taken in 1997, even thought it won't be taken until now? Question #2: Which IRS address / office would the client use to contact the IRS to explain the situation and to request a waiver to the 50%penalty? Question #3: Which table should be used for which year? His 77 year old wife is his beneficiary.