What this notice is about You owe taxes and penalties because you didn't take out the required minimum amount from your individual retirement arrangement (IRA), or you put into a tax-sheltered account more than you can legally. View this notice and manage your communication preference online Sign in to your Online Account to: View your balance Make and view payments View or create payment plans Manage communication preferences Access tax records View tax pro authorizations What you need to do Read your notice carefully. It'll explain how much you owe and how to pay it. Pay the amount you owe by the date on the notice. Make a payment plan if you can't pay the full amount you owe. Contact us if you disagree. You may want to Learn more about individual retirement arrangements. Learn more about how to make a payment plan. Learn more about how to submit an offer in compromise. Learn more about reasonable cause. Frequently asked questions What is a traditional individual retirement arrangement (IRA)? A traditional IRA is a retirement savings plan where the amount you put in is tax-deductible. The money you put in is usually not taxed until you take it out. A traditional IRA is not a Roth IRA or a SIMPLE IRA. What is a Roth IRA? A Roth IRA is a retirement plan where the amount you put in is taxable. But what the amount earns and what you take out is not taxable. What is a SIMPLE IRA? A SIMPLE IRA is a retirement plan sponsored by your employer. You put part of your pay into it. Your employer matches a certain amount of what you put in. You don't pay tax on what you and your employer put in until you take it out. How much do I have to take out from my traditional IRA? (updated Dec. 2, 2024) You must take out a required minimum distribution (RMD) amount from your IRA starting at age 70½. The amount you have to take out is based on your life expectancy. Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) PDF has a life expectancy chart. You divide the money in your account by the years of your life expectancy. The result is the minimum amount you must take out. You don't have to take out a minimum amount from Roth IRAs. Are there different types of tax-sheltered accounts? The different types of tax-sheltered accounts, besides retirement accounts, could include saving accounts for educational or medical PDF expenses. What is the maximum amount I can contribute to a tax-sheltered account? The maximum amount depends on the type of account. What happens if I can't pay what I owe? (updated Dec. 2, 2024) You can make a payment plan if you can’t pay the full amount you owe. You also have other options like an offer in compromise (OIC). If you’re facing financial hardship, you may be eligible to ask for a temporary collection delay until your finances improve. How can I make a payment plan? Call us at the toll-free number on your notice to talk about payment plans or learn more about them. What should I do if I disagree with the notice? Call us at the toll-free number on your notice. Please have your paperwork (such as cancelled checks, amended return, etc.) ready when you call. Can the penalty for not taking the full required minimum distribution be waived? (added Dec. 2, 2024) Yes, the penalty may be waived if the account owner establishes that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. In order to qualify for this relief, you must file Form 5329 and attach a letter of explanation. See the Instructions for Form 5329. Am I charged interest on the money I owe? Not if you pay the full amount you owe by the date on the notice. However, interest adds up on the unpaid amount after that date. Will I receive a penalty if I can't pay the full amount? Yes, you'll receive a late payment penalty. Call us at the number on your notice if you can't pay the full amount because of financial problems. We may be able to remove the penalty. Helpful information Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs) PDF Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) PDF Publication 594, The IRS Collection Process PDF Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans PDF Publication 970, Tax Benefits for Education PDF Form 656-B, Offer in Compromise Booklet PDF Form 9465, Installment Agreement Request PDF Notice 746, Information About Your Notice, Penalty and Interest PDF Tips for next year Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file. Reference tools Publication 1, Your Rights as a Taxpayer Notice Topic 651 Notice Topic 653 Full list of tax forms and instructions Need help? You can authorize someone to contact the IRS on your behalf. See if you qualify for help from a Low Income Taxpayer Clinic. If you can’t find what you need online, call the IRS number at the top of your notice or letter. If you didn’t receive a letter or notice, use telephone assistance. If you can't resolve the penalty on your own, contact Taxpayer Advocate Service, an independent organization within IRS.
