How to Request RMD Penalty Relief With a Letter to the IRS

You can request relief from RMD penalties by filing Form 5329 and attaching a reasonable cause relief request letter. It's critical to navigate this process carefully because the penalties are significant – as of 2025, the penalty for not taking a required minimum distribution from your requirement account is 25% of the untaken distribution (10% if corrected in a timely fashion). 

To help you out, this post features a sample RMD penalty relief request letter as well as tips for success. To protect yourself from excessive penalties, make sure you take the distribution that you missed within the correction window, and consider using TaxCure to find a tax professional who can help you deal with the IRS today.

Key takeaways

• If you incur an excise tax (penalty) for not taking the required distributions from your retirement account, you can ask the IRS to waive the tax.
• To do so, file Form 5329 and attach a letter with supporting details.
• In the letter, note why you didn't take the distribution and how you corrected the situation. 
• Note IRC Section 4974(d) – that's the section of the law that gives you the right to request relief.
• Use an RMD penalty relief letter template to get started. 

When you need to write an RMD penalty waiver letter

You will need to write a penalty relief letter if you have incurred RMD penalties and want the IRS to waive them. You should attach the letter to Form 5329, which calculates the penalties for not taking required distributions. 

The IRS says to do the following to request relief:

• Calculate the penalties as if the IRS has already approved your request for relief. 
• Note the reduced or waived penalty amount(s) on the relevant line(s) of Form 5329.
• Put a note that says "RC" (short for reasonable cause) next to the penalty line on Form 5329.
• Write the amount of the penalty you want waived.
• Attach a letter explaining why you qualify for reasonable cause.

You will incur RMD penalties if you're over the age of 73 and you don't take the required minimum withdrawal from your retirement account during the year. The RMD is based on your age and the balance in your account at the end of the previous year.

IRS Requirements for Waiving the Penalty

To get the penalty waived, you must show reasonable cause. Often, when it comes to penalty relief, the IRS describes reasonable cause as a significant issue (for example, death, serious illness, imprisonment, or natural disaster) that prevented you from paying a tax or filing a return on time. However, with RMD penalties, the agency takes a slightly more expansive approach to the definition of reasonable cause. 

In particular, the IRS will want to know if you acted reasonably. In other words, would another person have made a similar mistake? Were you negligent? Were you purposefully ignoring the IRS's rules? Did you take steps to correct the issue? These are the types of questions the agency considers when reviewing relief requests. 

What does the IRS consider reasonable cause?

The IRS reviews all letters on a case-by-case basis. So, a human will be reading your letter and applying their opinion on whether or not you qualify for relief. Here are some of the situations the agency may consider as reasonable cause:

• Illness or hospitalization that prevented you from taking an RMD.
• Confusion about the RMD minimum age requirements.
• Misunderstandings of how inherited IRAs work.
• Miscommunication or error by the financial institution or account custodian.
• Death of a family member.

The key to qualifying is to show that you acted in good faith (ie, you followed the rules to the extent that you understood them and that you were able to do so) and you corrected the issue promptly.

In all cases, even if you don't qualify for relief, you will incur a lower penalty if you take the required distribution during the correction window. 

Tips for Writing an RMD Waiver Letter

While writing your letter, keep these tips in mind:

• Keep it short, factual, and respectful - ask for relief, briefly explain the situation, and remember a human who deserves to be treated with respect is reading the letter
• Use a clear opening statement - open the letter by saying that you want the IRS to waive the excise tax under IRD Section 4974(d).
• Include contact details – even though the letter is attached to a tax form, you should still note your name, tax ID number, and the tax year involved.
• Outline the relevant details – note the amount of the distribution you missed and why.
• Share how you corrected the issue - the IRS is a lot more lenient if you have taken steps to fix the problem. Explain when you took your corrected distribution and how you plan to stay on track in the future.
• Attach supporting documents - consider including doctor's notes, medical records, or any other documents to support your request.
• Sign and date - finally, close the letter by signing and dating it. 

For best results, you may want to work with a professional. A tax pro who has experience with RMD penalties knows exactly what the IRS wants to hear in this situation. 

RMD penalties or excise tax?

You may have noted above that you need to ask for relief from an excise tax under IRC Section 4974(d). That's because the "penalty" for not taking required distributions is actually an excise tax, not a penalty. It's just commonly referred to as a penalty.

Similarly, if you take an early distribution from your retirement account before you reach retirement age, the 10% penalty is an excise tax as well. The IRS also charges excise taxes for making excess contributions to retirement accounts, health savings accounts, and similar investment accounts. All of these excise taxes are calculated on Form 5329. 

RMD penalty waiver sample letter

Use this letter as a starting point. You can copy and paste the text and modify it to fit your needs. Again, however, for best results, you may want to have a tax professional help you customize your request. 

Common mistakes to avoid in your waiver letter

To improve the chances of success, avoid these common errors:

• Being vague - be sure to share all of the relevant details. 
• Being too emotional – stick to the facts.
• Failing to mention corrective action - the IRS wants to know how you corrected the issue, not just why you made the mistake.
•  Not signing the letter - even though you signed your return, you still need to pop a signature on the attached letter. 
• Not including supporting details – make sure you attach any relevant documents that support your case.
• Sending a letter without Form 5329 - you need to include Form 5329. Normally, you attach this form to your tax return, but if you weren't required to file a return, you can submit this form on its own. 

Also, remember to note "filed pursuant to IRC Section 4974(d)" on both the 5329 form and the letter. Check out this post to learn more about how to avoid RMD mistakes. 

Where should I mail the letter?

The mailing address varies based on your location and whether or not you're attaching this form to an individual income tax return. Contact the IRS for the correct mailing address or talk with a tax pro if you're concerned. 

What happens after you submit the request?

The IRS will generally not send you a letter stating that they approved your request for relief. Instead, you'll get a letter if they don't approve your request, and if that happens, they'll assess the excise tax (penalty) against you. At that point, you'll generally receive a CP15 or a similar notice explaining the penalty and its due date. 

You can appeal the tax, but you must meet specific deadlines to do so. Depending on the specifics, you may need to pay the penalty and request relief with Form 843. 

When to contact a tax professional

Consider reaching out for a professional if the following apply:

• The penalty is large - the higher the penalty, the more at stake with your relief request.
• You've missed several years of RMDs - once you get years behind, you will also face failure to pay and potentially failure to file penalties, which a tax pro can also help you to address. 
• The calculations are complex - for example, if you're dealing with multiple types of retirement accounts, an inherited account, or other complicating factors. 
• You want to appeal a denial - if you've requested relief on your own and been denied, you should work with a pro on the appeal. 

A tax professional can help you amend returns, apply for penalty relief, negotiate with the IRS, set up payment plans if you can't afford the excise tax, and help you understand how to avoid these types of problems in the future. Need help applying for relief from other IRS penalties? Then check out this sample letter for penalty waivers.

FAQs about writing letters for RMD penalty waivers

Do I need to use a specific format for the waiver letter?

No, but you should structure the letter as formal correspondence with your name and contact details in the top right corner and the recipient's (IRS) details in the top left corner. 

How long should my RMD penalty waiver letter be?

Your letter should be to the point but also long enough to explain the relevant details. In most cases, the main body of the letter should be around 150 to 200 words or so.

Can I email or fax my waiver letter to the IRS?

You cannot email this letter to the IRS unless you're actively working with an IRS employee and they indicate that you can do so. You may be able to fax the letter if you have the correct fax number for sending in Form 5329. Call the IRS before faxing unless you're sure you have the right address. 

Generally, you need to mail this letter. However, if you're filing Form 5329 with a 1040 individual income tax return, you can e-file. A tax pro can help you attach a letter to an e-filed return.

What happens if I forget to include the letter with Form 5329?

The IRS may deny your request for relief because you didn't include any details to explain why you had reasonable cause or how you fixed the issue. 

How long does it take to hear back from the IRS?

You will not hear back if the IRS accepts your request for relief. If they don't accept your request, you may get a letter in the mail within eight to 12 weeks, but the exact timing varies.

Find help using TaxCure today.

To get help now, start your search on TaxCure. We are the only website with a curated directory of tax professionals who focus on tax resolution – use the filters to narrow down your search so that you only see results from tax pros who have dedicated experience with excise taxes, penalties, and penalty relief. 

Don't wait – the longer you wait, the greater the risk of the correction window closing. Also, you only have a limited amount of time to ask for relief on most penalties and excise taxes.