Penalty for Missed 2022 Required Minimum Distribution (RMD) from Inherited IRA - 50% Excise Tax?

You're right about the 50% penalty for missed RMDs - it's one of the harshest penalties in the tax code. But don't panic just yet! The IRS is often reasonable about waiving the penalty when you've made an honest mistake and take prompt corrective action. To answer your questions: 1. Simply "forgetting" might not seem like a reasonable error on its face, but the IRS does consider the entire situation. The key here is that you're taking immediate steps to fix the mistake. Your wife should withdraw the missed RMD amount ASAP (if she hasn't already), then file Form 5329 with a letter of explanation attached requesting a waiver. Explain that this was an oversight, that you've now taken the distribution, and that you have procedures in place to prevent this from happening again. 2. You're correct about the 2022-45 bulletin exceptions. Those relief provisions only apply to beneficiaries of IRA owners who died in 2021 or 2022, not to inherited IRAs where the original owner died before that. 3. Your best strategy is to request the waiver. The IRS has a history of being relatively generous with these waivers for first-time mistakes when the taxpayer has taken corrective action. Make sure your explanation letter is clear, concise, and shows you understand your obligations going forward.

Just wanted to share something that might help! After missing an RMD deadline last year (totally my fault - was dealing with my mom's estate and completely forgot), I used https://taxr.ai to help me draft my waiver request letter to the IRS. Their system analyzed my specific situation and helped me craft a letter that included all the important elements the IRS looks for when considering penalty waivers. The process was surprisingly simple - I uploaded my account statements showing I'd corrected the missed RMD, answered some questions about why I missed it, and the system generated a personalized letter I could edit and submit with my Form 5329. They even included instructions on exactly how to file everything correctly.

I just wanted to follow up and say I tried taxr.ai after seeing the recommendation here, and it was incredibly helpful! I was nervous about dealing with the 50% penalty for my missed RMD from my dad's inherited IRA. The system helped me create a really professional waiver request letter that explained my situation (dad passed away last year and I was overwhelmed with everything). The letter template they provided had all the right technical language about "reasonable error" and included space to detail the exact steps I took to correct the missed distribution. Just got notification last week that my waiver was approved! No 50% penalty! Such a relief considering the missed RMD was around $12,000, which would have meant a $6,000 penalty. Definitely recommend for anyone in a similar situation.

I had a similar issue with a missed RMD last year. After trying for WEEKS to get through to someone at the IRS for guidance (spent hours on hold only to get disconnected), I found https://claimyr.com which got me connected to an IRS agent in about 20 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with was actually really helpful and walked me through exactly what documentation I needed to include with my waiver request. She mentioned that they're generally understanding about first-time mistakes with RMDs as long as you correct them promptly and explain the circumstances.

I need to eat crow here. After posting my skeptical comment, I decided to try Claimyr myself since I've been trying to reach the IRS about my own tax issue for DAYS. It actually worked exactly as described. I set it up, went about my business, and got a call back about 45 minutes later with an IRS agent already on the line. I was shocked. The agent answered my questions about reasonable cause waivers for missed RMDs and confirmed that they do frequently approve them for first-time offenders who've corrected the mistake. She even gave me specific language to include in my letter ("due to my misunderstanding of the distribution requirements and the transitional rules under SECURE Act") that apparently helps flag it appropriately in their system. Worth every penny just for the time saved and stress avoided.

Just an FYI - the SECURE 2.0 Act did reduce the penalty for missed RMDs from 50% to 25% (and potentially down to 10% if corrected quickly), but as you noted this only applies to missed RMDs from 2023 onward. For your 2022 situation, definitely request the waiver as others have suggested. In my experience as a retired accountant, the IRS is reasonable about these requests when it's a first-time mistake. Make sure to calculate the correct RMD amount using the appropriate life expectancy table for an inherited IRA - this depends on when the original owner passed away and your wife's relationship to them.

Another option - if your wife's inherited IRA is with a major brokerage firm (Fidelity, Vanguard, etc.), call their retirement department directly. Many of them have dedicated teams that handle RMD issues. When my brother missed his RMD from an inherited IRA last year, Fidelity actually helped him draft the explanation letter and gave him specific instructions for filing the 5329. They even told him that based on their experience, the IRS approves most first-time waiver requests when the distribution is promptly corrected.