How to correct missed minimum required distributions from inherited IRA after several years?

This is definitely fixable, so try not to panic! The IRS actually has a process for this exact situation, and they're generally reasonable if you're proactively fixing the mistake. First, you'll need to calculate the Required Minimum Distributions (RMDs) you should have taken for each year since inheriting the IRA in 2019. The calculation depends on whether you're a spouse or non-spouse beneficiary and which distribution method applies to your situation. Since this was before the SECURE Act fully kicked in, you likely fall under the old rules where you use the Single Life Expectancy Table and your age in the year after your uncle passed. You'll need to take all the missed distributions ASAP. Then file Form 5329 for EACH year you missed the distribution. On the form, enter the amount you should have taken on line 8, and write "RC" (for reasonable cause) next to line 9, which is where the 50% penalty would be calculated. Attach a letter explaining that you weren't aware of the requirement, that you've now taken the distributions, and request a waiver of the penalty. The IRS has been pretty forgiving with these waiver requests when people correct the mistake on their own and demonstrate that they're now complying with the rules.

I went through something similar last year with an inherited IRA from my grandparent. After panicking about the penalties, I used this AI tool called taxr.ai (https://taxr.ai) that really saved me. It analyzed my situation and helped generate all the documentation I needed for the IRS. The tool walked me through calculating my missed RMDs and even helped draft the reasonable cause letter to attach to my Form 5329s. What I found most helpful was that it pulled the exact IRS regulations that applied to my situation and showed me previous rulings where penalties were waived under similar circumstances. Since you're dealing with multiple years of missed distributions, having something that can organize everything chronologically and keep track of all the calculations would be super helpful. The peace of mind alone was worth it for me.

I was honestly really skeptical about using an AI tool for such a serious tax issue, but after seeing several recommendations for taxr.ai, I decided to give it a try for my own inherited IRA problem. I'm actually amazed at how well it worked. The tool guided me through exactly what documentation I needed from my financial institution, helped me calculate the precise amounts I should have taken for each year, and generated a personalized letter explaining my situation to the IRS. What really sold me was how it organized everything year by year and kept track of all the different deadlines and requirements. I just got confirmation last week that the IRS approved my penalty waiver request for all three years I missed. Saved me potentially thousands in penalties and hours of stress trying to figure it all out. Definitely worth checking out if you're in this situation.

Another approach worth considering - if you're having trouble getting through to the IRS about your situation, try Claimyr (https://claimyr.com). I had been trying for WEEKS to reach someone at the IRS about my own missed RMDs from an inherited IRA, and kept getting disconnected or waiting for hours. Claimyr got me connected to an actual IRS agent in under 20 minutes. They have this system that navigates the IRS phone tree and waits on hold for you, then calls you when an agent picks up. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with walked me through exactly what documentation I needed and confirmed that the penalty waiver was a routine process as long as I was correcting the mistake proactively. Getting that direct confirmation from the IRS gave me so much peace of mind compared to just guessing what they might accept.

I was completely wrong about Claimyr. After my skeptical comment, I decided to try it anyway out of desperation - I had been trying to reach the IRS for MONTHS about my missed RMDs from an inherited 401k (similar situation to an IRA). The service connected me to an IRS representative in about 17 minutes, which honestly felt like magic after my previous failed attempts. The agent confirmed exactly what I needed to do: take the missed distributions immediately, file Form 5329 for each year with a reasonable cause statement, and include documentation showing I've now complied. The agent even gave me a specific reference number for our call and told me to include it in my letter. I've already submitted everything and am waiting to hear back, but just getting clear instructions directly from the IRS rather than guessing was incredibly valuable. Definitely worth it if you're stuck trying to resolve inherited IRA issues.

One thing nobody's mentioned yet - if your uncle passed in 2019, you need to be VERY clear about whether the SECURE Act applies to your situation, as it changed the rules for inherited IRAs. The act went into effect January 1, 2020, so if your uncle died in 2019, you should be under the old rules, which means you can take distributions based on your life expectancy. But if for some reason the account wasn't properly transferred until 2020, you might fall under the 10-year rule instead, which has different requirements. Double check when the IRA was actually transferred to your name as the beneficiary. Also, if you're a spouse, non-spouse, minor child, disabled, chronically ill, or not more than 10 years younger than the deceased, different rules apply. Make sure you're following the correct set of rules for your specific situation.

Quick question for anyone who knows - I'm in a similar situation but with a much smaller inherited IRA (about $43k). Is there a minimum amount where the IRS doesn't care about missed RMDs? Like if the penalty would be really small, do they sometimes just ignore it? Just wondering if there's a threshold where it's not worth their time to pursue.

I went through this exact situation with my father's inherited IRA back in 2021. Missed three years of RMDs and was absolutely terrified about the penalties. Here's what worked for me: First, don't panic - the IRS really is reasonable about penalty waivers when you're proactively fixing the mistake. I calculated all my missed RMDs using the Single Life Expectancy Table (you can find it in IRS Publication 590-B), took all the distributions immediately, then filed separate Form 5329s for each missed year. The key is the reasonable cause letter. I explained that I wasn't aware of the RMD requirement due to inexperience with inherited accounts, that I discovered the error through my own research, and that I had now taken all required distributions and would comply going forward. I attached documentation showing I had taken the catch-up distributions. The IRS waived all penalties - saved me about $4,200. The whole process took about 6 months from filing to receiving the waiver approval. The hardest part was actually getting all the year-end account statements I needed for the calculations, so make sure you contact your IRA custodian for those historical balances. One tip: when you take the catch-up distributions, ask your custodian to code them properly for each tax year they relate to, not just dump them all as 2025 income. This can help with the tax impact.