So you failed to take a required minimum distribution from your individual retirement account. Now you're staring at a 50 percent penalty on the money you should have withdrawn after turning age 70½. But don't just accept the penalty, say personal financial advisors. You may be able to get the IRS to forgive your mistake. The penalty for not taking RMDs is steep. According to the IRS worksheet for figuring RMDs, a traditional IRA holder must withdraw about 3.65 percent by the last day of the year the holder turns 70½, which is the year RMDs begin. The percentage rises each year after that.

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For a $200,000 IRA, the first-year RMD is about $7,300. If the account holder fails to take the RMD as required, the penalty comes to half that, or $3,650, plus whatever taxes are due. "It's a terrible penalty," said Steven Trytten, a CPA and attorney at Anglin, Flewelling, Rasmussen, Campbell & Trytten in Pasadena, California. "And every year that goes by without an RMD, it's another 50 percent of what the distribution should have been for each year. "Over time that can be a huge number." More than a few retirement savers find themselves contemplating this dismaying prospect, according to personal financial advisors. "I get this question a lot," said Justin Fort, a certified financial planner and founder and president of Fort Wealth Management. Fortunately, he and other experts say that most people who neglect to make RMDs as scheduled can avoid paying the stiff penalty if the situation is addressed promptly, voluntarily and with the proper paperwork.

Routes to RMD forgiveness

If you realize you have failed to take an RMD, prepare to come clean. "You need to 'fess up to it as soon as it happens, because the longer it goes, the more penalty you're going to accrue," said Josh Sailar, a certified plan fiduciary advisor with Miracle Mile Advisors. If the year a saver turns 70½ passes without an RMD being taken, there is no problem — at least at first. That's because the deadline for the first year's payment is April 1 of the following year. The deadline after the 71st birthday and all following birthdays is Dec. 31 of the year the birthday occurs. "It makes sense that the very first time the general public is required to take this, there's a little bit of leeway given," said Tamra Stern, a CFP and partner at Main Street Research. More from Fixed Income Strategies:

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Money flows into passively managed bond funds In the event the Dec. 31 due date for an RMD passes without the RMD being taken, the next step is filing an IRS 5329 form. "You file the tax form with a letter of explanation and take your required minimum distribution when you file your tax form," Stern said. "Typically, the IRS will get back to you within a couple of months and let you know if they accept your letter of explanation or if they don't." Reasons given for neglecting to take an RMD may range from ignorance or forgetfulness to illness or natural disaster. Stern said that when wildfires ravaged the Napa Valley region, some people cited the catastrophe when requesting waivers. For most reasons, the IRS is generally forgiving when a taxpayer comes forward of his or her own accord, according to planners. "In all my years, I have not heard of a case where someone confessed their sins and did not get forgiveness," said attorney and CPA Trytten.

The limits of forgiveness

There are gotchas with unpaid RMDs, however, and one is that there is effectively no statute of limitations. There is generally a three-year limit on how long the IRS has to assess additional taxes after a return is filed, Trytten noted. "But the three years normally doesn't start on this issue until you've reported what's going on with your IRA," he added. "Say for the last 10 years you should have been taking RMDs and didn't, and now you're trying to report it, you have to go back all 10 years." Another potential catch awaits people in their first year of becoming subject to the RMD. While there's no specific penalty for waiting until April 1 of the year after they turn 70½ to make it, the tax impact of doing so could be sizable, noted Scott Stratton, a CFP with Good Life Wealth Management. "Most people take it in the year they turn 70½ because if you wait until the following April, you're going to have to take two RMDs that year," Stratton said. "That can cause you to end up with a bigger tax bill than if you spread it out over two years."