RMD failure beneficiaries

[Scuba 401]

sponsor underpaid RMD's to a few beneficiaries. IRS allows for a reduced fee for RMD failures but the form 14568-H says that RMD failures involving beneficiaries is not eligible for the reduced fee. I cant find this in the Rev Proc. anyone have any experience with this? my clients vcp fee would go up from 500 to 5000 and it only involves 5 or 6 beneficiaries. seems absurd.

[Scuba 401]

this one has stumped the board...

[John Feldt ERPA CPC QPA]

I see what you mean, the instructions say, yes, in all caps:

DO NOT USE THIS FORM IF ANY PARTICIPANT IS DECEASED OR THE FAILURE INVOLVES A BENEFICIARY OR IF BENEFITS WERE NOT PAID OUT TIMELY AT NORMAL RETIREMENT AGE. IF YOU CANNOT USE THIS FORM, ATTACH A WRITTEN NARRATIVE TO FORM 14568 AND PROVIDE THE NECESSARY INFORMATION REQUESTED BY THAT FORM)

Based on that statement, perhaps you could still use the form 14568 with an attached a narrative and submit it with the $500. Try marking 8a of Form 8951 and enter $500 in the blank. If they come back and explain that you must pay more, withdrawing the application should still be an option.