Missed RMD, Rollover and Correction

[JRG]

We have a client with a participant who did not receive an RMD, then 2 years later received a lump sum distribution of his entire account and rolled it over to an IRA. Client filed an EPCRS submission and requested a waiver of the 50% excise tax, and told the IRS it would notify the former participant of the missed RMD so that it can be distributed from his IRA.

If the participant does not take a distribution from his IRA, what happens? The RMD amount's are gone from the client's plan so correction by that plan can't be made by a distribution. If the former participant does not take a distribution within the 150 day correction period, does the excise tax waiver go away?

[Tom Poje]

before you can request a waiver from the excise tax, you must provide some type of proof that a correction has been made (or perhaps at a minimum in the process of being made, though (without looking it up) I thought it actually had to have been made)

In the old days, you actually had to send in the penalty tax and request it be waived.