Owners of individual retirement accounts might face increased scrutiny by the IRS in the near future, posing the danger of hefty penalties for account mistakes that have previously gone unnoticed. As this recent online Wall Street Journal article notes, the IRS recently has been cracking down on secret foreign accounts and high earners. Now its attention is likely to turn to IRA account holders as the agency implements more aggressive enforcement strategies in reviewing IRA accounts. The agency will report its new policy regarding taxpayer errors to the Treasury Department by October 15, but until then, account owners should take extra care to ensure that any past withdrawal and contribution errors are corrected proactively and to prevent future errors, as the penalties for such errors can amount to 50% of the amount IRA holders failed to withdraw.
Here are some rules to keep in mind when reviewing your account with your lawyer, CPA or financial planner.
Herman-Giddens, JD, LLM, TEP, CFP, Attorney at Law (NC, FL, TN),
Board Certified Specialist in Estate Planning and Probate Law (NC). North
Carolina Registered Guardian, Solicitor, England and Wales. Follow
his blog, North Carolina Estate
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