Just discovered RMDs not handled year 2000 through 2010

[JAinNC]

Situation: My client for past 5 years.... age 85 - was widowed prior to 1999 - unaware that husband deceased IRA had been rolled to her. She is a fairly sharp lady and always has brought in every piece of tax mail she receives. She has multiple investments from many banks etc.

A few week ago I discover an IRA is in her name (Financial adviser - deceased) another person in that company gives me info I need - However they have no date of birth on my client - until I give it to them.

I advised client to have her local Edward Jones finacial advisor request IRA moved to ED Jones. She did and Ed Jones guy faxed me a sheet with RMDs for each years since year 2000.

I was going to include the Excess Accum for 2010 only- And then file prior years'5329s since 2000 and request waiver of 50% tax.
Should I calculate the rmd as if the prior year had been distributed with a reduction accumulation for each year after 2000 OR use the YR-End balance as they are at this time?

Thanks for you responses - I searched but no situation on board for multiple old years.
Guidance appricated. Got clients waiting - I'll check in after lunch time.

Jeannie Allen EA

[Golden Rocket]

2010 only

JA there has been quite a bit of discussion with respect to RMD 2010 failures, since you are only filling out 5329 for 2010.

Long and short, no one is aware of any code or regs which permit abatement of the penalty. However, custodians and other board members are telling us that the IRS is routinely dismissing penalties for 2010 failures if the custodian makes the 2010 distribution by April 1 of 2011.

The only thing still unclear is whether this April 1 arrangement and abatement requires an amended return for 2010 or whether the RMD will appear on a 1099-R for 2011. One of our board members seems to think a 1040-X for 2010 is correct.

[Kram BergGold]

All RMD on 1011 1099-R

Recently I dealt with a missed 2010 RMD and the person at Vanguard said bith 2010 and 2011 would be on a 2011 1099 R.

My only question for you is since IRS never caught this can you forget about missed RMD's before 2007?

[Kram BergGold]

Also

Any chance amount in excess of RMD were withdrwn from other IRA's so the taxpayer actually withdrew enough.
Last, rememeber 2009 is ok, there were no RMD's.

[JAinNC]

[QUOTE=Kram BergGold;118874]Recently I dealt with a missed 2010 RMD and the person at Vanguard said bith 2010 and 2011 would be on a 2011 1099 R.

My only question for you is since IRS never caught this can you forget about missed RMD's before 2007?[/QUOTE


I don't know- can I? I could but is that ethical?

Yes had NO OTHER IRAs -- Only state retirement, SS, farm rental, 55000 in interest and dividend and 30,000 in tax exempt interest.

I could use the current 2010 RMD and let her pay it in with 2010 return.

Not sure I can amend 2008 and then ignore all the prior years.

Any other suggestions???

Jeannie EA

[Golden Rocket]

Statute of Limitations

Jeanie, the statute of limitations for most items only goes back 3 years. I'm sure that's where the suggestion came from which asked it you can ignore everything before 2007.

If you can ignore those years because of the statute of limitations, it is perfectly ethical to do so. If it helps any, if your client discovered a situation which would entitle him to massive refunds prior to 1997, the IRS would disallow them because of the statute of limitations.

"Ethical" may not be the cure-all, do-all word, but for both sides to live within the statute of limitations is sort-of "Rules of the Road" mentality.

[JAinNC]

Thanks Golden

You are right. I think will include the 2010 excess and she can pay the 50%. Her new custodian Financial advisor is distributing all the excess in 2011 and withholding what I requested. Because we are acting to correct this immediately, my first reaction has changed a bit.

Thanks to all you guys out there - sanity still exists here..... most of the time.

Jeannie Allen EA