RMD's, Excise taxes and "exceptions"

[Demosthenes]

Once again we approach the end of another calendar year. As with the end of every calendar year (and April 1st), I fully expect to see at least some situations where RMD's have not been paid out and where the excise tax is going to come due.

Does anyone have any hard examples of "river of tears" letters resulting in tax waivers, PLRs on the topic etc? Just trying to get ahead of this years crop of "my dog ate my paperwork" stories and get a feel for what has a reasonable chance of success and what does not.

Thanks

[Mary Kay Foss]

I have never seen any PLRs dealing with penalty waivers. We usually attach a statement to the income tax return to request the waiver. The statement always says that they took out the missing amount as soon as it was discovered and gives a reason of some sort. It might say that the individual was relying on the custodian who failed to perform or that the person is elderly and forgetful.

If you attach the waiver request to the 1040 (and Form 5329) for the year that the RMD was insufficient, you never know if they approved of your reason or just missed the forms but as long as they don't assess a penalty, I'm OK with that.