I forgot to take a required distribution or all of my required distribution or the company did not process my required distribution on time. What do I do now?

A missed distribution, even if it isn’t your fault, is subject to a 50% penalty on the amount not distributed. You should take the distribution as soon as you realize it was missed. The penalty is reported on Form 5329 for the year of the missed distribution. IRS can waive the penalty for good cause. To get the penalty waived, you must take the distribution, file Form 5329 without the penalty payment, and include a letter to IRS requesting the waiver of the penalty. It is likely that you will not get a response from IRS. In this case that is good news, as it will mean that they have agreed to waive the penalty. They have three years to come back and say you owe it and they will then be entitled to collect the 50% penalty plus interest and penalties on that amount dating back to when the penalty should have been paid. So be sure you have a good reason for requesting the waiver to avoid being in a worse tax situation.

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