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Each year can be filed as the 5329 alone (separately for each year.) Signature at the bottom.
Age 59.5 only impacts early withdrawal penalty. Withdrawal is always taxable (at least partially) Does the client qualify for a waiver?
Waiver of tax for reasonable cause.
The IRS can waive part or all of this tax if you can show that any shortfall in the amount of distributions was due to reasonable error and you are taking reasonable steps to remedy the shortfall. If you believe you qualify for this relief, attach a statement of explanation and file Form 5329 as follows.
Complete lines 52 and 53 as instructed.
Enter "RC" and the amount of the shortfall you want waived in parentheses on the dotted line next to line 54. Subtract this amount from the total shortfall you figured without regard to the waiver, and enter the result on line 54.
Complete line 55 as instructed. You must pay any tax due that is reported on line 55.
The IRS will review the information you provide and decide whether to grant your request for a waiver. If your request is not granted, the IRS will notify you regarding any additional tax you may owe on the shortfall.
Answers are easy. Questions are hard!
